How to Protect Your Interests When Using Purchase Orders
Share
Posted by John L. on August 9, 2016 in Contractor Focus

A purchase order is a contract authorizing a purchase of goods or services. You should be sure it contains all the essential details, including a purchase order (PO) number, a list of products with quantities and pricing, shipping date and address, billing address, and payment terms. Many software programs provide templates you can use to make this process even easier.  

 

Purchase orders provide many benefits. A good purchase order provides detailed instructions on the order and adds legal clarity to the process. Controlling costs becomes more manageable by ensuring purchases are approved. Referring to a PO number makes tracking orders easier for both the buyer and the supplier. By using a PO, you have a permanent record of the item you ordered, which can be useful when assigning purchases to specific job expenses or removing items from inventory.

 

However, it’s important that you review purchase orders carefully and know you can attach your own specific terms and conditions as needed to protect your interests. Here are some questions you may want to address in your terms and conditions for consideration:

 

  1. Who pays for damages, such as product defects, shipping damages, and damages caused by installation?
  2. Can you reserve the right to refuse defective goods?
  3. Who owns the rights to custom fabricated orders?
  4. Is the supplier licensed and insured? If so, does their insurance cover their employee(s) while working on your job site?
  5. Can the supplier charge you for overtime without your consent?
  6. If items or services purchased are not delivered within a reasonable time frame, who is responsible for any increased cost related to re-shipment, rework, or cancellation?
  7. In the event of a claim, who is responsible for legal fees?
  8. Who will communications flow through to ensure all parties are in the loop around project updates (contractor, owner, architect, engineer, etc.)?
  9. Does your purchase order specifically reject supplier’s terms and conditions, and by supplier accepting this purchase order, is supplier accepting the terms and conditions stated in this purchase order?

 

Consulting legal counsel to draft your terms and conditions is wise. They can tailor language to your company’s specific needs. Using purchase orders won’t avoid all problems, but well-constructed contracts can help resolve many issues that do arise.

John L. is our Construction guru
I bring over 35 years of experience in the construction industry in both field and office positions to Acuity including carpentry, welding, project management, contract negotiation, and much more. Also, I founded my own commercial general contracting firm specializing in building grocery stores. Over the years I’ve worked closely with architects, civil engineers, and developers. I’ve found it instrumental to build solid relationships with all involved in the construction project, including insurance companies. This is why I am here, I want to help you the contractor better understand insurance and help Acuity to offer products and services that meet your unique needs. I feel a close connection to construction and with my background I feel that I can make sure contractors have a better insurance experience.


Get a quote today and Achieve Total Acuity
Posted By: John L. on April 15, 2019 in Contractor Focus
Those of you who know me have probably heard me speak about the importance of having a mentor. My definition of a mentor might be a little different than the dictionary’s, but it has the same goal. To me, a mentor is a person who has already walked your path, wants you to succeed, and is willing to tell it to you straight.
Posted By: John L. on March 25, 2019 in Contractor Focus
When it comes to construction, there is no set hiring season. It can fluctuate depending on where you are located, how deep the frost is, and how wet the spring is. But when it is time to dig, pour concrete, or start framing after a long quiet winter, you are going to want to have your team in place.
Posted By: John L. on March 19, 2019 in Contractor Focus
Regardless of how much you prepare, job-site challenges can still appear at any time. There are many potential causes for problems on a construction site, including weather, unforeseen site conditions, union issues, poor communication, scheduling delays, errors in construction plans, documentation management, unreliable subcontractors, incorrect custom orders, improper contracts, builder mistakes, unexpected costs, and much more.