Running a business often involves legal documents and contracts, each serving a different purpose.
An order form is usually an inevitable document for businesses involved in procurement, sales, and large-scale purchases. Thankfully, business owners can use an order form app like POWR to manage orders more efficiently.
With so much emphasis on order forms, it is natural to wonder what an order form is and if it can constitute a legally binding contract.
What Is an Order Form?
An order form, or business order form, is used to request a product or service.
It contains the specific details of one or more business transactions between a buyer and a seller. It usually involves a buyer submitting a request for goods or services to the seller.
However, many government agencies also use order forms to negotiate deals with private companies.
Buyers use purchase order forms to place product orders with a seller, specify how many of each product they want, define payment terms, and document purchases.
In most cases, orders placed through forms are prepaid as soon as the seller accepts them.
What Is a Contract?
A contract is a legally binding agreement between two or more parties.
Documents can pass as contracts only when they spell out the terms of the agreement, including the value of a product or service, the duration of the agreement, and a legal obligation to complete a task.
Is an Order Form a Contract?
An order form becomes a legally binding contract only after the seller accepts the order. When both parties sign the order form, they are bound by the agreement's terms.
This means that the seller agrees (by signing the order form) to deliver or produce the product specified in the online form, and the buyer is legally obligated to submit the agreed payment for the product or service.
For an order form to be considered a legal contract, it must contain at least the contact information for the buyer and seller, a description identifying the product requested, the quantity of product ordered, the cost per unit, the total price, the terms of payment, and the signatures of the buyer and seller.
However, it is important to know that by itself, an order form does not qualify or create a contractual agreement. The document can only be passed as a contract after the seller accepts the purchase order.
This is because there must be an offer, and it must be accepted before any contract is created.
What to Know About Contractual Agreements Using Order Forms
When a seller receives an order form, they can accept or reject the offer.
If the seller accepts and fulfills the buyer's request without making any adjustments to the order, it is called acceptance. However, if the seller agrees to the order but makes changes and sends an invoice back to the buyer, there may be some back-and-forth negotiating.
Under the Uniform Commercial Code, a contract can be formed in both scenarios. A contract can still be created even if the two forms do not have identical details.
The additional terms or changes are considered to be part of the contract unless rejected by a party or if the new terms materially alter the originally proposed agreement.
In cases where legal validation is required, such as high-value B2B purchases or regulated industries, some companies also turn to notarizing online to ensure that digitally signed order forms carry full legal weight.
This means many businesses can now create, customize, send, and sign purchase order forms without printing a single document.
E-order forms can be customized, too, saving time on both ends. POWR is a powerful platform businesses can use to create efficient, high-quality order forms.
It simplifies how to set up an online order form for any business owner.
What Is the Purpose of an Order Form?
Any business involved in procurement, sales, large orders, or high-value transactions must use order forms.
For sellers, order forms are necessary for documenting business orders, managing inventory purchases, and pairing shipments with purchases for auditing or bookkeeping.
For buyers, order forms can be used for account record-keeping, tracking arrival and payment of goods, better control over the procurement process, ensuring delivery of orders, and managing incoming and pending orders. After both parties agree to an order, it serves as the contractual agreement to fulfill and accept it.
