Is it a Contract?

 In Uncategorised

Contracts can come in many shapes and sizes and not all of them look like legally binding documents. Accordingly, not all of them are given the consideration they deserve.

Documents like purchase orders with no actual “contract” attached, but which refer to “purchase order terms” or some other terms and conditions which can be found at a website, can be just as effective in binding you to an enforceable contract as any formal, written and signed agreement.

A client of ours recently supplied goods for a relatively large, national customer pursuant to the receipt of a one off purchase order. Our client failed to read the purchase order carefully and did not appreciate that by supplying the goods in response to the purchase order, it had just agreed to be bound by a set of purchase order terms and conditions that it had never even seen. The terms were referred to in the PO, but not attached.

To cut a long story short, our client had agreed to (among a number of other critical issues) warranty conditions on the supply of those goods which were well outside the usual warranties provided by our client.

The moral of the story is review every piece of documentation in relation to an order or arrangement with your customers (and suppliers for that matter). Even if a document does not look like a legally binding contract, it may well be.

Osborn Jensen offers has vast experience in reviewing, drafting and negotiating all manner of supply and purchase contracts. If you need more information or assistance on the above topic, call Tim Osborn on (02) 4925 2077.

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