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Purchase Order/Contract
A purchase order/contract is issued to the supplier/contractor. The offer once accepted by the supplier/contractor becomes a legal contract by which the supply must supply the goods as per the terms of contract. The purchase order covers all the essential data indicated on purchase request, RFQ, quotation and subsequent updated points, and finalised during negotiations. Many companies have pre-printed general conditions of contract, which is enclosed to purchase order.
Even in the case of contracts, the contractor gets an offer covering the points quoted above, along with general conditions of contract and the statutory guidelines to be followed at site during execution.
The copies of purchase order/contract are sent to finance, inward goods and the project manager after it is approved.
A purchase order/contract offered by the purchaser needs to be accepted by the supplier/contractor through an acknowledgement, to mature into a legally binding agreement.
Although purchase order for imported material/equipment covers all the parameters listed above, it will have certain unique parameters as it is an overseas transaction.
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