Purchase order terms and conditions
These Purchase Order Terms and Conditions (the “Terms”) are agreed as of [Effective date] between [Buyer legal name], of [Buyer address] (the “Buyer”), and [Supplier legal name], of [Supplier address] (the “Supplier”), and apply to every purchase order the Buyer issues to the Supplier (each a “PO”) for goods (“Goods”) or services (“Services”).
1. Formation and order of precedence
A PO is accepted when the Supplier accepts it in writing, including by email or portal, or starts performance. Each accepted PO, together with these Terms, forms a separate contract (an “Order”).
If documents conflict, the order of priority is: (a) specific terms written on the face of the PO and agreed by both parties; (b) these Terms; and (c) specifications referred to in the PO. Terms in the Supplier's quotes, acknowledgements, invoices or website do not apply, even if signed or accepted electronically, unless the Buyer expressly agrees to them in a signed writing.
2. Prices
Prices are as stated in the PO, are fixed for the Order, and include packaging, labelling, and [delivery to the location in the PO / delivery terms stated in the PO]. Applicable sales taxes such as GST/HST or US state sales tax must be shown separately on the invoice. No extra charges apply unless the Buyer agrees in writing in advance.
3. Invoicing and payment
The Supplier will invoice after delivery of the Goods or completion of the Services, quoting the PO number, with supporting documents. The Buyer will pay correct, undisputed invoices within [Payment terms] days of receipt. The Buyer may withhold disputed amounts, in good faith and with written reasons, until the dispute is resolved.
The Buyer may set off amounts the Supplier owes it under any Order against amounts it owes the Supplier, after giving written notice. Changes to the Supplier's bank details must be confirmed in writing by an authorized Supplier officer and verified by the Buyer through a known contact before taking effect.
4. Delivery
The Supplier will deliver the Goods, and perform the Services, on the dates and at the locations stated in the PO. Time of delivery is important. The Supplier will notify the Buyer promptly of any expected delay and its cause. If a delay of more than [10] business days is caused by the Supplier, the Buyer may cancel the affected part of the Order without liability, or require expedited shipping at the Supplier's cost.
The Supplier will pack and label Goods to prevent damage and comply with applicable law, including transport of dangerous goods rules, and include a packing slip with the PO number.
5. Title and risk
Title and risk of loss in the Goods pass to the Buyer on delivery at the location stated in the PO, unless the PO states other delivery terms, in which case the stated Incoterms rule applies.
6. Inspection and rejection
The Buyer may inspect the Goods within a reasonable time after delivery, and in any case within [30] days. Payment is not acceptance. The Buyer may reject Goods or Services that do not conform to the Order. For rejected items, the Supplier will, at the Buyer's option and the Supplier's cost, promptly replace or re-perform them, or refund the price paid. The Supplier will collect rejected Goods at its cost and risk.
7. Warranties
The Supplier warrants that for [Warranty period] months after delivery or acceptance, whichever is later, the Goods will: conform to the specifications, samples and descriptions in the Order; be new, of merchantable quality, and free from defects in design (to the extent designed by the Supplier), materials and workmanship; be fit for any purpose stated in the Order; and be delivered with good title free of liens.
The Supplier warrants that Services will be performed with due skill, care and diligence, by qualified personnel, in line with good industry practice and the Order.
The Supplier warrants that the Goods and Services will comply with all applicable laws, including product safety, labelling, environmental, export control and sanctions laws, and that the Goods were not made in whole or in part with forced labour or child labour.
These warranties survive inspection, acceptance and payment and are in addition to any warranties implied by law that the parties have not excluded.
8. Changes
The Buyer may request reasonable changes to an Order, such as quantities, delivery dates or specifications. If a change affects cost or timing, the Supplier will tell the Buyer within [5] business days and the parties will agree an equitable adjustment in writing before the change is implemented.
9. Cancellation
Cancellation for convenience. The Buyer may cancel all or part of an Order for convenience by written notice before shipment of the Goods or completion of the Services. The Buyer will pay for Goods already shipped or completed and reasonable, documented costs the Supplier has incurred that cannot be avoided or mitigated, but not lost profits on the cancelled part. Standard catalogue items may be cancelled without charge before shipment.
Cancellation for default. Either party may cancel an Order by written notice if the other materially breaches it and does not cure the breach within [10] business days after notice, or becomes insolvent.
10. Intellectual property
Specifications, drawings, tooling and materials provided by the Buyer remain its property and may be used only to fulfil the Buyer's Orders. Deliverables created specifically for the Buyer under an Order belong to the Buyer on payment. The Supplier keeps its pre-existing intellectual property and grants the Buyer a non-exclusive, perpetual licence to use it as part of the Goods and Services.
11. Confidentiality
The Supplier will keep confidential all non-public information it receives from the Buyer, including the Buyer's pricing, specifications and Orders, use it only to perform Orders, and not disclose it except to personnel who need it and are bound by similar duties, or as required by law. The Supplier will not publicize its relationship with the Buyer without the Buyer's written consent.
12. Indemnity
The Supplier will defend and indemnify the Buyer, its affiliates and their personnel against third-party claims, losses and reasonable legal costs arising from: (a) bodily injury, death or property damage caused by defective Goods or by the negligence or wilful misconduct of the Supplier or its personnel; (b) claims that the Goods or Services infringe a third party's intellectual property, except to the extent caused by the Buyer's designs; and (c) the Supplier's breach of law. The Buyer will defend and indemnify the Supplier against third-party claims that the Buyer's specifications infringe intellectual property rights.
13. Limitation of liability
Neither party is liable for indirect, consequential or lost-profit damages. Each party's total liability under an Order is limited to [the greater of two times the Order value and Amount]. These limits do not apply to indemnity obligations under section 12, breach of section 11, bodily injury or death, fraud, or wilful misconduct.
14. Insurance
The Supplier will maintain commercial general liability insurance, including products and completed operations coverage, of at least [Amount] per occurrence, and other insurance reasonably required by the Order, and provide certificates on request. When performing Services on the Buyer's premises, the Supplier will also maintain workers' compensation coverage as required by law and follow the Buyer's site safety rules.
15. Force majeure
Neither party is liable for delay caused by events beyond its reasonable control that could not have been prevented by reasonable precautions, if it gives prompt notice and uses reasonable efforts to mitigate. The Buyer may cancel the affected Order without liability if the delay exceeds [30] days.
16. Compliance and conduct
The Supplier will comply with the Buyer's supplier code of conduct provided to it, applicable anti-bribery laws such as the Corruption of Foreign Public Officials Act (Canada) and the Foreign Corrupt Practices Act (US), and applicable supply chain reporting laws. The Supplier will keep records relating to Orders for [3] years and make them available for reasonable audit.
17. Term
These Terms apply from the Effective Date until either party ends them by [30] days' written notice. Ending these Terms does not affect Orders already accepted, which continue to be governed by them. The United Nations Convention on Contracts for the International Sale of Goods does not apply to any Order.
18. Governing law and disputes
This Terms is governed by the laws of [Province or state] and the federal laws of [Country] that apply there, without regard to conflict-of-laws rules that would apply the law of another place.
If a dispute arises, the parties will first try in good faith to resolve it by discussion between people with authority to settle it, for at least 30 days after one of them gives written notice describing the dispute. If the dispute is not resolved in that time, either of them may start proceedings in the courts located in [City, Province or state], and each submits to the non-exclusive jurisdiction of those courts.
Nothing in this section prevents anyone from seeking urgent injunctive or other interim relief from any court with jurisdiction to protect confidential information, intellectual property or property, or to prevent irreparable harm.
19. Notices
Any notice under this Terms must be in writing and delivered by hand, by courier, by registered mail, or by email to the address shown in the signature block or another address given by notice.
A notice is received: when delivered, if delivered by hand or courier on a business day before 5:00 PM local time at the place of receipt, and otherwise on the next business day; on the fifth business day after mailing, if sent by registered mail; and when sent, if sent by email before 5:00 PM local time of the recipient on a business day with no automated message that it was not delivered, and otherwise on the next business day.
Routine operational communications may be sent by any reasonable means, but a notice of breach, termination or a claim must also be sent by a method listed above.
20. Entire agreement and general terms
Entire agreement. This Terms, including any schedules and documents it expressly refers to, is the entire agreement about its subject matter and replaces all earlier discussions, proposals and agreements about that subject matter, whether written or oral.
Amendments and waivers. A change to this Terms is effective only if it is in writing and signed by each party. A failure or delay in enforcing a right is not a waiver of it, and a waiver of one breach is not a waiver of any other breach.
Assignment. No party may assign this Terms without the prior written consent of the others, which will not be unreasonably withheld, except that an organization may assign it without consent to a successor to all or substantially all of its relevant business or assets by giving written notice. This Terms binds and benefits the parties and their permitted successors and assigns.
Severability. If any provision is found invalid or unenforceable, it will be limited or removed to the minimum extent necessary, and the rest of this Terms stays in full force.
Interpretation. Headings are for convenience only. The words “including” and “includes” mean “including without limitation”. Amounts are in [Currency] unless stated otherwise. A reference to a law includes any amendment or replacement of it.
Language. The parties have expressly required that this Terms and all related documents be drawn up in English. Les parties ont expressément exigé que la présente entente et tous les documents connexes soient rédigés en anglais.
21. Counterparts and electronic signatures
This Terms may be signed in any number of counterparts, each of which is an original and all of which together form one document.
The parties agree that this Terms may be signed and delivered electronically, including through an electronic signature service such as eSora Sign. An electronic signature, and a signed copy delivered by email or as a PDF, has the same legal effect as a handwritten signature on a paper original, to the extent permitted by applicable law, including the U.S. Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) as adopted in the relevant state, Part 2 of the Personal Information Protection and Electronic Documents Act (PIPEDA), and provincial electronic commerce legislation in Canada.
Each party consents to receive this Terms and related notices electronically, and agrees that the electronic record of the signing process, including any certificate of completion and audit trail, may be used as evidence that this Terms was signed and of when it was signed.
Signatures
By signing below, each signer confirms that they have read and agree to this Terms and, where they sign for an organization, that they are authorized to bind it.
SUPPLIER
Organization: [Legal name of organization]
Name: ______________________________
Title: ______________________________
Signature: ______________________________
Date: ______________________________
Email for notices: ______________________________
BUYER
Organization: [Legal name of organization]
Name: ______________________________
Title: ______________________________
Signature: ______________________________
Date: ______________________________
Email for notices: ______________________________