Glossary
Purchase order
A purchase orderA purchase order is a buyer's written request to buy named goods or services on stated terms. It can form a contract if it is an offer that the supplier accepts. When each side fires its own standard terms, you have a battle of the forms. A master services agreement should say that its terms beat any PO small print.More in the glossary is a buyer's written request to buy named goods or services on stated terms. It can form a contract if it is an offer that the supplier accepts. When each side fires its own standard terms, you have a battle of the formsA battle of the forms happens when each side says the deal is on its own standard terms. English law looks for which offer was accepted, often the last shot before performance. Butler Machine Tool Co Ltd v Ex-Cell-O Corp [1979] 1 WLR 401 is the leading case. A signed master that beats later POs is the clean fix.More in the glossary. A master services agreementA master services agreement (MSA) sets the legal terms for an ongoing relationship, with each project then agreed in a separate statement of work.More in the glossary should say that its terms beat any PO small print.
Last updated 28 October 2026
Agencies see POs after the commercial deal is done: a number the client’s finance system needs before it will pay. That number is useful. The terms printed on the back of the PO are the problem. If you start work after a PO that says “our terms apply”, you may have accepted them. See battle of the forms and Butler Machine Tool [1979] 1 WLR 401.
We would rather the master services agreement or the signed statement of work win. Lex can put an order-of-precedence line at the top: this paper beats any PO. Quote the PO number for the client’s accounts, and do not sign the PO’s own signature block.
Does a PO create a contract?
It can. If there is no signed master, the PO may be the offer and starting work the acceptance. If there is already a signed contract, the PO is usually only a call-off or an accounts reference — unless its small print is accepted as a addendumAn addendum is a short, written change to an existing contract, signed by both sides so the original terms stay the same except for what the addendum updates.More in the glossary. Do not let a later PO rewrite the liability cap.
What if the PO and the contract disagree?
The paper that was accepted last, or the paper your order-of-precedence clause names, wins. Write: “If a purchase order conflicts with this agreement, this agreement prevails.” Without that line you are in a battle of the forms.
Should we start work on a PO alone?
Only if you are willing to live with its terms, or if a signed master already covers the job and the PO is just a number. A PO with no cap, no IP clause and a 90-day payment term is a bad first contract. Put the deal on a shared link and treat the PO as the client’s internal reference.
How do we quote a PO without accepting its terms?
Invoice against the PO number, and say on the invoice and in the contract that the PO is for the client’s reference only. Do not tick “I accept the attached standard terms” in the client’s portal. That tick is an acceptance.
A worked example
A studio has a signed MSA. The client later sends PO 88421 with two pages of buyer terms, including unlimited liability and Net 60. The studio does not sign the PO. It starts the SOW already signed under the MSA, invoices against PO 88421, and points at the MSA line that says the MSA beats any purchase order. Finance gets its number; the cap stays where it was.
How it shows up in a contract
Sample wording · our own drafting
A purchase order, release or similar document issued by the Client is for the Client's internal reference only. If it conflicts with this agreement, this agreement prevails. Performance against a purchase order is not acceptance of any terms printed or linked on that purchase order.
In Plain English
The PO number is for the client’s accounts. If the PO’s small print fights this contract, this contract wins. Doing the work is not a yes to the PO terms.
Common mistakes
- Signing the PO’s signature block and accidentally accepting a second set of terms.
- Starting work on a PO with no master and no statement of work.
- Letting a later PO rewrite payment termsPayment terms say how much is paid, when the clock starts, and what happens if an invoice is late.More in the glossary or the liability cap.
- Ticking “accept standard terms” in a vendor portal after you already have a signed paper.
Frequently asked questions
What is a purchase order in a contract?
A buyer’s written request to buy named goods or services. It can be a contract, or only an accounts reference, depending on what else is signed.
Does a PO create a contract?
It can, if it is an offer that the supplier accepts by signing or starting work. A signed master should say the master beats the PO.
What if the PO and the contract disagree?
Without an order-of-precedence line you have a battle of the forms. Write that the signed agreement prevails. See /glossary/battle-of-the-forms.
Should we start work on a PO alone?
Only if you accept its terms, or a signed master already covers the job. Otherwise put the deal on one shared contract first.
Related
Related clauses and templates
The legal wording governsLast reviewed 28 October 2026Pending lawyer review