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Supply Chain Management Professional (SCMP) · Question

A purchase order (PO) typically becomes a legally binding contract when:

A PO becomes a legally binding contract once the supplier accepts its terms and conditions, forming an agreement between the buyer and seller.

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Question: A purchase order (PO) typically becomes a legally binding contract when:

Answer options:

  • It is issued by the buyer. ✅ The supplier acknowledges and accepts the PO.
  • The goods are delivered.
  • Payment is made by the buyer.

Correct answer: The supplier acknowledges and accepts the PO.

Explanation: A PO becomes a legally binding contract once the supplier accepts its terms and conditions, forming an agreement between the buyer and seller.

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