Purchase Order (PO)

A Purchase Order (PO) is a formal written document issued by an importer or buyer to an exporter or seller after confirming the terms of a transaction, used to order specific goods or services. Its core contents include product description, quantity, unit price, total price, delivery date, payment terms, trade terms (such as FOB, CIF), packaging requirements, and shipping method. A PO is usually legally binding and, once accepted by the seller, constitutes a contract. Usage scenarios: The buyer issues a PO after accepting a quotation, confirming samples, or completing negotiations, and the seller arranges production or shipment accordingly. Precautions: The PO should be clear and accurate to avoid ambiguity; if there is a conflict with a Proforma Invoice (PI) or Sales Contract (SC), the priority must be clarified; the buyer may require the seller to countersign (PO confirmation) for it to take effect. Difference from PI: A PI is issued by the seller to confirm quotations and transaction details, often used by the buyer to apply for a letter of credit or pay a deposit; while a PO is issued by the buyer and is a formal procurement instruction. Compared with a sales contract, a PO is more concise, but its legal effect depends on the agreement between both parties.