Purchaase Orders - are they a valid contract?

gettingtheresometime

Well for what my opinion is worth, I would say that a PO is issued to say that the purchase of the goods or services have been authorised - and that if the PO number has been issued incorrectly or not authorised properly then it's a matter for the issuing company not the receiving company to deal with.

Many invoices actually require a PO to be quoted before they will even considered for payment but again, if the number has been issued incorrectly how was the OP supposed that?

I don't think that POs do have any legal standing I think that they are just an indication to the receiving company that the purchase has been authorised otherwise any Tom !!!! or Harry could order stuff on behalf of their company.....though some companies also use them as a means of keeping control of budgets as well

HONEYMONSTER

sangie595 wrote: »

Not sure that I would agree - if the terms/ invoice were only provided to the client after the receipt of a P.O. then I am not sure that it could be described as a binding contract. But I suspect this is irrelevant. The entire thing appears to have been a fiasco, on your organisations behalf as well. Telling them that you didn't know whether they had paid or not, and that you had unaccounted payments on the books that you didn't know who they belonged to - you actually have them "permission" not to pay until you lot had sorted out your acts, and in that time, I think I might have developed cold feet about your ability to deliver the event if you couldn't work out where your incoming money comes from! At best this appears to be six of one and half a dozen of the other.

But the allegation appears to be harassment. And if that is the case then the validity or otherwise of the purchase order isn't really the issue - it is the method used to elicit payment. So that is more likely to be their focus - what did you say and how did you say it? And did you have sufficient authority, for example, to imply or threaten that you would take legal action? Because in these circumstances I would think that taking legal action would be cutting off their noses tho spite their face. Charities require goodwill from companies, and the possible loss of income from a stall at an event is small - compared to the loss of future goodwill from that company, it may be a price they weren't ready to pay.

But if what you have done was with your manners full knowledge and support, then that is your defence. If they approved your actions, then they need to say so.

Firstly thanks for your comments but just to make it clear, the client was already substantially late in making payment and was less than two weeks away from the event and we had been chasing them, BEFORE THE UNALLOCATED PAYMENT WAS RECEIVED. They had not raised any query or concern at that point. The appropriate sum appeared in our bank account without quoting our requested invoice number and the company was not one we recognised so we could not connect it to anyone - this is an occasional situation for anyone who does book-keeping, you generally have to wait until the sender comes forward to be able to allocate it. Unfortunately at that point in time, time was of the essence and as the unallocated monies was a very specific sum that matched our fee for the event, it was a reasonable assumption to make that a payment had been made by someone who had booked a stand. The fact the accounts person wanted to check, gives no indication that the stand was not wanted, in fact to the contrary, if as was finally stated, they did not authorise or book a stand, why would he need to check if payment had been made and why didn't he simply tell me at that stage that the stand was not needed?

The organisation has been running these events successfully for years so there was no valid reason to doubt our ability to run the event. We do not make a profit, just cover our costs and we have to account for our finances to our Trustees. However this wasn't an organisation donating monies to us, it was an opportunity for them to sell their product with minimal outlay at a large event.

nicechap

I would suggest you re-read Sangie's post very carefully and absorb the advice offered.

You have only been there 6 months so could be out the door tomorrow without any comeback.

You need to be sure that anything you've said or done could not be misconstrued to bring the organisation into disrepute. And its not whether you or I or another stranger on the internet think what you said or wrote was OK, its whether your bosses think its OK or not.

xapprenticex

Yes, I agree with Sangie, given your position, "legal action" shouldn't be coming out of your mouth, that's something for your bosses boss (Board members).

But if you ran it past your boss first and he 'okayed' it then its his problem, and that brings us back to the scapegoat situation.

ScorpiondeRooftrouser

You're a charity. You are reliant on goodwill. If the managers of the charity feel your actions will lower the goodwill people feel towards you, then it doesn't matter a damn if you had the legal right to chase the payment. They might think you should go round to people who don't pay, thank them for not paying, and give them a cake, purely in the hope that they will pay for things on future occasions.

It's not about having the legal right to chase the invoice, it's a matter of did you act in a way in which your employers wished you to act. If someone senior told you to act in this way, then that is your only excuse. If you wrote an email that was more abrupt, shall we say, than anyone asked you to, then that's on you.

HONEYMONSTER

Firstly thank you for what are on the whole many helpful and constructive comments but I think some people are confused about the question.

At no point have I threatened legal action, I have sought the input of the team including Trustees to decide the way forward with this being a possible outcome and being a reasonably new member of the team it is an appropriate thing to do to understand the practices of the charity, I am a Senior Manager and people should not read into this something which has not been stated. I haven't given all of this previously its not relevant to the question being asked although some people want to take it there.

I am fully aware of what the potential is with my employer, I am not naïve but that was not the question. The question was whether a purchase order was legally binding?

Furthermore, making inappropriate accusations about harassing clients for money when they deem they have never placed an order can also be harmful to our reputation particularly when they are clearly not true and with years of debt collecting experience I am used to diversion and deterrent actions.

Thanks for all of the input, I appreciate your time.

sangie595

I can see the way that this that is going now - the usual, "if you say something I don't like or agree with, I'm going to say you are confused/ wrong/ don't know what your are talking about". So this will be my final contribution to this thread, and then it is in the lap of the gods....

No, OP - it is you that is confused. If the employer chooses to make this about the complaint, it doesn't matter one jot whether the purchase order is binding or not. This is employment law not financial law. The fact that you are "senior" (whatever that means in a small charity) does not override the very clear fact that you have less than two years employment, and they can dismiss you at the drop of a hat for almost any reason - or none at all! People are attempting to give you advice to mitigate that fact, because that is the relevant information, whether you realise it or not. You see, even if a purchase order is legally binding (and I know it isn't in its own right - one of our employers had some stolen a few years back and the thief attempted to use them but they were not held to be liable for that as they were not correctly issued under the authority of the organisation, exactly the same argument this company are making) it doesn't matter - the complaint is your word against theirs that you harassed them. Again, it doesn't matter whether it is your job to chase debts - harassment is about how you chase them, not if you do! Given that you have a background in debt collection, you must fully understand what I am saying here. Collecting debts is not illegal, but there are actions that some debt collectors take which are. Or which verge on the edge of illegal. That is what the company are alleging - that you acted improperly in the methods you used with them.

Approaching this as "they owe us money, it's the law, so I am entitled to get it back because that's my job" is confrontational, and plays into exactly the scenario that the company are complaining about - the "how" you act, rather than the "what" you are doing. You need a softer approach that shows that you were dealing with this matter in a professional way and that you didn't threaten or attempt to intimidate, and that you had consulted with management all the way through this.

In my experience, and it is rather substantial, whilst many charities are good employers, when they are not they are really bad! They don't care whether something is right, or fair, or anything else - only about control and position. The very fact that your are being pulled into a meeting about this, rather than just having a conversation with your manager, is screaming that there is something wrong here. This shouldn't be a big deal if they are viewing it on the same way you are putting it - a conversation with the manager should be enough to put their minds at rest that everything was done correctly and the manager is happy with your conduct.

Now nobody can predict how this will play out. It may be that they will accept your explanation and that's the end of it. But the fact that it is this formal means that there is a very real prospect of other, disciplinary, outcomes. Given that you have no employment protection, and given that they are having this meeting so that suggests they are taking the complaint seriously, you should think about what that may mean for your continued employment - and act accordingly. It doesn't have to be about "i did nothing at all wrong and the law is on my side". You are making the wrong argument. This should be about how what you did was measured, calm, proportional and within your authority. And if they don't agree with you, about mitigating the damage and taking it on the chin, if you wish to continue your employment with them.

Pennywise

[QUOTE=steampowered;73280021The_points_made_by_other_posters_about_whether_T&Cs_were_attached_seem_not_relevant_to_me._It_is_not_necessary_for_there_to_be_a_detailed_set_of_T&Cs_for_there_to_be_a_legally_binding_contract._A_buyer_issuing_a_PO_which_is_accepted_by_a_seller_is_all_that_is_required._[/QUOTE]

Don't agree with that at all. If the PO is a binding contract, then the terms & conditions must be provided to the customer, before the PO is made, or at least immediately upon the supplier receiving the PO giving the customer the T&Cs and some kind of cancellation option.

A supplier can't impose a set of T&Cs after the event. For any terms/conditions to be binding, the customer must have been given full details of them before making the commitment. If they havn't, then the T&Cs can't be binding upon them. Quite simply, you can't agree to something you didn't know about at the time.

steampowered

It seems to me that this is being completely blown out of proportion.

You haven't actually said what the meeting will be about.

Is it not possible that the meeting is nothing more than a discussion for the boss to understand the situation - so that he can make a decision on whether he wants to pursue the debt or not?

If there is a problem with how you have acted, then the boss will presumably explain it to you in the meeting.

Either way, there is nothing more to be done until you've gone to the meeting and found out what this is all about. There is no need to lose sleep over it.

steampowered

Pennywise wrote: »

Don't agree with that at all. If the PO is a binding contract, then the terms & conditions must be provided to the customer, before the PO is made, or at least immediately upon the supplier receiving the PO giving the customer the T&Cs and some kind of cancellation option.

A supplier can't impose a set of T&Cs after the event. For any terms/conditions to be binding, the customer must have been given full details of them before making the commitment. If they havn't, then the T&Cs can't be binding upon them. Quite simply, you can't agree to something you didn't know about at the time.

If T&Cs are not provided at the time the contract is agreed, the consequence is that the T&Cs will not form part of the contract. They will simply be a meaningless bit of paper.

That does not mean there is no contract. There is still a contract. It is simply that the T&Cs will not form part of the contract.

In this situation, there does not appear to be any issue regarding any T&Cs. The Op hasn't said anything about anybody trying to rely on a clause in the T&Cs.

The issue for the charity is whether a contract was formed when a formal purchase order was submitted for the event and an invoice issued. It seems to me that the answer is clearly "yes" - whether the employer wants to pursue the matter is up to them.

(and I know it isn't in its own right - one of our employers had some stolen a few years back and the thief attempted to use them but they were not held to be liable for that as they were not correctly issued under the authority of the organisation, exactly the same argument this company are making)

If a document is submitted by a fraudster, that is not legally binding.

If a contract is concluded by someone who a reasonable observer would conclude has authority to act on behalf of the employer, such as an employee submitting a purchase order, that is legally binding on the employer whether or not the person had actual authority. See https://en.wikipedia.org/wiki/Apparent_authority.