purchase order (po)
Definition
A purchase order is an official document your business sends to a supplier that says 'I want to buy these specific items at this specific price.' Once the supplier accepts it, the purchase order becomes a legally binding contract between both parties. It protects you by locking in the agreed price, quantity, and delivery terms before any money changes hands.
Example
You run a bakery and send your flour supplier a purchase order for 500 pounds of flour at $0.80 per pound to be delivered by Friday, and once they confirm it, both of you are legally committed to those exact terms.
Watch Out
If a supplier ships goods or you accept a delivery without an agreed purchase order in place, you may have a much harder time disputing the price or quantity later in court.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.