Order Confirmation

Order Confirmation is a formal document or act in foreign trade transactions whereby the buyer or seller provides written confirmation of the agreed terms of a deal. It is typically issued by the seller after receiving the buyer's order, listing key terms such as product name, specifications, quantity, unit price, total price, delivery date, payment method, and packaging requirements. Once signed and returned by the buyer, it is deemed that a contract has been formed. Usage scenarios include: after the buyer issues a Purchase Order (PO), the seller reviews it and issues an Order Confirmation; or after both parties reach an agreement through negotiation, they formalize the rights and obligations in the form of a confirmation. Points to note: First, an Order Confirmation is not equivalent to a formal contract, but it is legally binding and should be treated with caution. Second, if the confirmed content differs from the buyer's order, it should be clearly marked 'subject to this confirmation' or modified through negotiation. Third, unlike a Proforma Invoice (PI), which is mainly used for the buyer to apply for a letter of credit or make payment, an Order Confirmation focuses on the final confirmation of transaction terms by both parties. Fourth, compared with a Sales Contract, an Order Confirmation is more flexible in format and suitable for small transactions or long-term cooperative customers. Foreign trade practitioners should ensure that the terms of the Order Confirmation are clear and complete to avoid disputes caused by ambiguity.