US Purchase Order template

Overview

A purchase order (PO) is the buyer's formal offer, or in some transactions its acceptance, to purchase specified goods at a stated price. In the United States, purchase orders and the seller's corresponding order acknowledgment or invoice are governed by Article 2 of the Uniform Commercial Code (UCC), adopted with local variations in every state, which supplies the default rules for contract formation, delivery, risk of loss, and remedies for goods transactions (services are generally governed by state common law instead, so a purchase order for pure services sits outside UCC Article 2's specific default rules). The most distinctive US legal feature relevant to a purchase order is UCC §2-207, the "battle of the forms" rule. When a buyer's purchase order and a seller's acknowledgment or invoice contain differing or additional terms — as is nearly universal in practice, since each party's standard form usually favors itself — §2-207 determines which terms actually become part of the contract. Between merchants, additional terms in an acceptance generally become part of the contract unless they materially alter it, the offer expressly limits acceptance to its own terms, or the offeror objects within a reasonable time; conflicting terms are typically either knocked out (with UCC gap-filler rules applying instead) or resolved under the "last shot" or "knockout" approaches depending on the jurisdiction's case law, which varies somewhat by state. A well-drafted purchase order should therefore include an express clause stating that acceptance is limited to the purchase order's own terms and that any additional or different terms in a seller's response are rejected, to strengthen the buyer's position in a battle-of-the-forms dispute. When to use it: for a discrete purchase of goods (and, with adaptation, related services) from a supplier, whether a one-off purchase or issued under a broader supply arrangement. Key clauses: description, quantity, and specifications of goods ordered; price and payment terms; delivery date, method, and destination (Incoterms-style delivery terms, if relevant for domestic or cross-border shipment); risk of loss and title transfer point; inspection and rejection rights; warranties (express warranties stated, plus the UCC's implied warranties of merchantability and fitness for a particular purpose, unless expressly and conspicuously disclaimed); a battle-of-the-forms clause limiting acceptance to the purchase order's own terms; cancellation rights before shipment; and governing law. Pitfalls to avoid: silently accepting a seller's differing acknowledgment terms by proceeding with the transaction, which under §2-207 can result in the seller's terms (including its own limitation of liability or arbitration clause) becoming part of the contract; disclaiming implied warranties without meeting the UCC's conspicuousness requirement (typically requiring specific, capitalized "AS IS" or similar language), which can leave the disclaimer unenforceable; and omitting a specific delivery date and remedy for late delivery, leaving only the UCC's general default remedies.

Information to customize

• Buyer's legal name

• Buyer's address

• Seller's legal name

• Seller's address

• Purchase order number

• Description, quantity, and specifications of goods

• Price and payment terms

• Required delivery date

• Delivery destination

• Include implied warranty disclaimer language?

• Governing state law

• Date the purchase order is issued

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Frequently asked questions

What happens if the seller's acknowledgment has different terms than our purchase order?

This is governed by UCC §2-207, the "battle of the forms" rule. Between merchants, additional terms in the seller's response can become part of the contract unless they materially alter it or the buyer's purchase order expressly limits acceptance to its own terms — which is why including that limiting language in the purchase order matters.

Does the purchase order need to reference the Uniform Commercial Code explicitly?

Not strictly, since UCC Article 2 applies automatically to goods transactions in every state (with local variations), but referencing it and the governing state clarifies which state's version of the UCC controls.

Are implied warranties automatic under US law?

Yes, for goods, the UCC implies warranties of merchantability and fitness for a particular purpose unless the seller conspicuously disclaims them, typically through specific "AS IS" language that meets the UCC's conspicuousness standard.

Can we cancel a purchase order after it's issued?

Only as the purchase order itself allows, or under general contract law if the seller hasn't yet accepted. Once accepted and especially once goods have shipped, cancellation rights are typically limited to what the contract specifies.

Is a purchase order for services also governed by the UCC?

No — UCC Article 2 applies specifically to goods. A purchase order that is really for services (or a mixed goods-and-services transaction) is governed by general state contract law for the services portion, and courts apply a "predominant purpose" test for mixed transactions.

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