Legal Question in Business Law in Massachusetts

Re: Purchase Orders

Part 1 of 2.

"It is my understanding that a Purchase Order for

goods to be procured is not a legal contract unless

the "supplier" receives the "hard copy order" and

sends back the "acknowledgement" signed. Is this

correct ? Many orders are placed verbally and

acknowledgements do not always get back to us.

Please advise. Thank You"

This happens ALL the time in business!

My question for you ... what's happening, exactly?

(Answer candidly as I consider your answer to be

confidential.) Respond to [email protected] or call

me up in Newton, MA.

To answer prematurely your question "is that

correct?", I'd say, no, or at least, it's not

that simple. Here's a clarification that will

help. In the law governing contract formation,

(answering the question of whether or not there

IS a contract) there is a general requirement

that there be an offer by one party and then an

acceptance of the offer by the other. In general

contract law, enforceable contracts can be oral

and a contract is formed, so that no signatures

or papers are required at all (though useful

as proof in a court of law, later!). However,

there are exceptions to that statement. There's

a set generally called "Statute of Frauds"

(meant to prevent fraud and false testimony about

oral contracts) that, for example, don't allow

any contracts for sale of land to be made on

a handshake / phone but rather require "a writing."

(There's a whole set of those exceptions; see

http://www.magnet.state.ma.us/legis/laws/mgl/gl-259-toc.htm

for yourself.)

CONTINUED

Stuart Williams

Law Offices of Stuart J. Williams

21 Walter St.

Re: Purchase Orders

CONTINUATION: Part 2 of 2.

But your situation, I'm guessing, probably falls under a more

specific area of law, the Uniform Commercial Code (UCC). Was this

order for "goods" as opposed, let us say, to services? (The definition

of goods is more specific than the everyday language use, and you can

look at

http://www.magnet.state.ma.us/legis/laws/mgl/106-2-105.htm

to get an idea of how to get started. Make sure

also that you are a "merchant" under the definition. Or just

write me and tell me what you're sellin'!) Was this contract for a single

delivery? Had you often delivered to this very client before without

confirmation in writing? By the way, does the client deny agreeing to

the order on the phone or does he say, "well, yes, but we didn't send you

the acknowledgment?" Or are you worried that if you ship the goods you

won't get paid and won't have a contract to help you enforce your right to

payment? There are rather well-established ways of handling each of those

situations, which occur rather routinely in business dealings.

General rules: the forms themselves may state

that there is or is not a contract unless or

until receipt of some signed form is had, and the

exact wording of the fine print on your forms does

count for something, and is important, ... BUT

custom within the industry and in particular your

prior experiences with this particular experience

can outweigh the fine print pre-printed on some

standardized forms. (Then, to illustrate some of

the possible complexity, suppose the acceptance /

acknowledgment form changes the terms (for example,

payment or interest terms!), as they often do, and

then the confirmation form showing receipt of order

changes terms once again, so no two forms ever agree ...

and the two parties never have signed one single form, ...

it's a wonder our wheels of business turn at all in this

litigious society! That puzzle is labelled "war of forms"

and has good solutions: there IS a contract, but the terms

of that contract may have to be resolved, maybe by a judge.)

I hope I've amused you, because I cannot have really answered

your question very well. You have to give more facts to get an

applicable and accurate answer.

Stuart Williams

Law Offices of Stuart J. Williams

21 Walter St.