How to Write a Purchase Order: Understanding Key Purchase Order Provisions
Knowing how to write a purchase order is important for anyone who runs a business. Purchase orders provide retail businesses a means of contracting their sales. A purchase order is a type of contract, specifying in writing the agreement that the seller and buyer have made in terms of the transaction. Like all contractual agreements, purchase order forms should contain particular provisions that protect the interests of both the buyer and seller.
Purchase order forms can vary depending on your particular type of retail business. The easiest way to develop a purchase order form is to take a generic form and adapt it to your line of business.
How to write a purchase order
The provisions you should include when drawing up a purchase order form are:
Names of the seller and purchaser
This provision should list the names and businesses of both the seller and purchaser.
Purchase items
Should include an itemized listing of all goods and services being purchased.
Representations and warranties
Puts in writing the basic assumptions that underlie the transaction, particularly with respects to the condition of goods and expectations in terms of services. Warranties refer to guarantees the seller makes in terms of goods and services, including refund and return policies.
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Price
The price of the goods and services, along with any taxes, discounts, shipping fees, and handling charges.
Delivery
Describes how the seller will deliver the goods and/or provide the services to the purchaser.
Payment terms and conditions
This provision outlines the terms of payment, whether it is cash on delivery or financed by the seller. This should include any interest and late charges that relate to the financing of the purchase.
Legal recourse
Boilerplate clauses that are common to most contracts and protect the interest of both parties.
Learn more about writing purchase orders
Visit the AllBusiness.com Forms and Agreements section to view a sample purchase order.
