Business Contracts
Purchase Order
Texas
Can a purchase order be legally binding without a signed agreement?
I recently entered into a business transaction with a supplier where we discussed the terms and conditions of the purchase verbally, and they sent me a purchase order outlining the specifics of the deal, but we did not sign any formal agreement. Now, they are claiming that the purchase order is binding and are demanding payment, but I am unsure if it holds legal weight without a signed agreement.
Answers from 1 Lawyer
Answer
Business Contracts
Texas
Darryl S.
ContractsCounsel verified
It's not clear from the question if you verbally committed to the order or PO. This is something that you can and should dispute with the supplier. The purchase order may contain the essential elements of a contract: an offer (the specific goods/services), acceptance (your verbal agreement if it was given), consideration (the payment terms), and intent to create legal relations (business context). Contract law generally recognizes that commercial agreements don't always require signatures to be enforceable. If you made a verbal commitment, followed by the written purchase order, this could constitute what's called a "course of dealing" that courts may recognize. That said, the specifics of your situation matter greatly. If you never agreed to the order or the purchase order contains terms that weren't part of your verbal agreement, or if there are significant discrepancies between what was discussed and what's in the document, you have grounds to dispute certain elements.
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