IACCM Contract Management Forum

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2020-05-27 20:22:26

Best Practices - Signed or unsigned Purchase Orders

Hi All -- Looking for any insights as whether you require signed purchase orders for goods and services or not (esp. for U.S. transactions). On the one hand, it's a lot of work to chase signatures, especially on low-dollar POs, but on the other hand it seems like not having signatures could lead to POs being arguably unenforceable.

 •  World Commerce & Contracting  •   2020-05-27 20:45:59
Thanks for the question. In principle, a purchase order should be executed in accordance with the underlying agreement (in the US and elsewhere). Typically, the underlying agreement will also identify the individual/group that is authorized to commit the entity to engage with the supplier.

There are several ways to reduce the amount of effort in execution though. Perhaps by using technology to capture the requirement and authorize the transaction. At a minimum, you should be able to use electronic signatures to automate the execution process. There are several excellent service offerings out there .. please check out our software evaluation tool software.iaccm.com/ for more information.
 •   2020-05-28 07:44:00
Adding to Paul's comment, the question is mostly whether the elements of a contract are present. In most countries (but not all) a signature in itself isn't needed. The key tests will be:

One party must make an offer to the other;
The other party must then accept the offer;
There must be some form of consideration i.e., payment;
The parties must intend to be legally bound by the contract; and
There must be sufficient certainty within the terms of the contract.
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