I was reading a local article where a website developer was making a big fuss about the differences in detail in a purchase order and a contract. And I thought, wait a second here, a purchase order is a contract. They’re called one-off contracts.
Here is the difference. Contracts in general are legal documents that bind two parties into doing something. You can put as much detail or as little detail in these, but to be royally screw yourself in a court of law, corporate counsel will always detail it into oblivion. Easiest way to protect yourself is to detail away if you don’t have counsel running all of your business gigs. Purchase Orders are made by the purchasing agent where what is needed, at what time, and at what price is specified. Once this is accepted by the vendor, then it is also a contract that is enforceable. The only thing it means is that it’s a one-off contract which means it’s a one-time deal. The purchasing agent has to create another purchase order to send to the vendor, and the vendor has to accept it to create another binding contract. Again, these are contracts which means the vendor can negotiate and put in more details the same as the purchasing agent before sign-off.
What I didn’t get in the article itself was the fact that there was some discussion on level of detail in a purchase order versus contract, which is completely incorrect. Purchase orders must be signed off by the vendor to be accepted which provides the level of specification. It’s like a RFP but coming from the buyer instead of the vendor providing one. This ensures that all of the questions are asked by the vendor on what you are and are not doing when you walk into this contractual obligation.
Another interesting tidbit that I gathered from the article and quotes was that the purchase order was somewhat more generic. Having done enough contractual work in my life on similar contracts, I have to say that this is where you get burned as a vendor. In accepting a contractual agreement in a more generic and broad sense, you are bound by the contract to do all the nitty gritty detailed work that you didn’t “foresee”. And the court of law doesn’t change in this fact as you can see from patent law where if a broader patent is granted, then that broader patent usually is the one that is being infringed upon by the more specific patent.
Granted here, I’m not a corporate lawyer, but I’ve had to deal in my life with enough contracts to know when you’re going to sign into a really nasty situation or not. Most contracts have ways out, and so do purchase orders, but they have to be written in. If not, the county in this case technically could pursue this in a court of law from the details of the transaction given. Whether or not they would is up to to them.