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Breach of Quotation after Issue if Purchase Order

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Essentials
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Breach of Quotation after Issue if Purchase Order

Postby Essentials » Wed, 21 Oct 2009 9:04 pm

Hi, Can anyone advise me for this question.

I have a customer who wan me to do some cabling jobs and puchase of some equipments. I have sent them the quotation and they have issued a Purchase order. But they would like to reduce the down payment from 50% to 40%. I refused as they still have outstanding bill overdue. Right now, they have engaged another company to perform the job which was initially assigned to me. Can i claim the down payment from them even they have cancelled the job.

I have the chop and sign copy of my quote and their Purchase Order.

Pls advise....

Thank you.

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ksl
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Re: Help.... Breach of Quotation after Issue if Purchase Ord

Postby ksl » Wed, 21 Oct 2009 9:55 pm

Essentials wrote:Hi, Can anyone advise me for this question.

I have a customer who wan me to do some cabling jobs and purchase of some equipments. I have sent them the quotation and they have issued a Purchase order. But they would like to reduce the down payment from 50% to 40%. I refused as they still have outstanding bill overdue. Right now, they have engaged another company to perform the job which was initially assigned to me. Can i claim the down payment from them even they have cancelled the job.

I have the chop and sign copy of my quote and their Purchase Order.

Pls advise....

Thank you.
This is a contractual issue and not an order being cancelled issue, both parties entered the agreement in good faith, however terms and conditions where not agreed upon in writing, as far as i can see. Though if i was you and you feel duped, i would get the free legal aid, at one of the community centres and ask what you should do.

You may have a chance of arbitration in the small claims court, if you can prove you have had any financial loss, which no doubt you have, it's in your favour if they are in debt to you too. They may well be ordered to settle their debts.

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Strong Eagle
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Postby Strong Eagle » Wed, 21 Oct 2009 10:53 pm

Does the amount of the down payment cover the past due amount they owe you? If yes, I'd keep it, apply it to the past due amounts and never do business with them again.

If the past due amount is larger, how do you intend to collect? Will keeping the down payment make it easier or harder to collect?

Court should always be the last option.

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sundaymorningstaple
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Postby sundaymorningstaple » Wed, 21 Oct 2009 11:13 pm

It would appear that they haven't given any down payment yet. So keeping it as partial payment of past due amounts looks out of the question.

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ksl
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Postby ksl » Thu, 22 Oct 2009 3:51 pm

sundaymorningstaple wrote:It would appear that they haven't given any down payment yet. So keeping it as partial payment of past due amounts looks out of the question.
Quite right, and without actually seeing the documentation involved, quotation and purchase order, it's not really easy to give any advice.

Though the client is in debt to the supplier already, one would have to look at the amounts involved, before taking any action, though i legal letter may just turn the screws enough to make the person sit up. It's sad that this occurs, lessons are learned the hard way and there will always be the kind of people that will stretch the payment terms, as long as they can.

Take legal advice and pull in the debt and inform them politely that your company policy must be followed, if they wish to continue doing business with you, allow them sufficient time under the economic climate, if possible. Diplomacy is key!

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Postby ScoobyDoes » Thu, 22 Oct 2009 4:12 pm

I don't think technically you can claim the downpayment.

Downpayment is basically a means to guaranteeing, from the client side, that the job gets started/done and from the seller's side that work can commence.

Personally if i request a downpayment it is because i will not start anything until there is money in hand, and likely the client knows this as well. There is/should not be any loss incurred from your side unless you have started work in good faith but then the problem for losses becomes your own.

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Postby brittanny » Sat, 24 Oct 2009 9:30 am

basic rule of contract: offer and acceptance

in a commercial transaction a purchase order is a contract between the seller and buyer that details pricing, delivery and the products or merchandise

here the "buyer" has issued the purchase order representing their request to purchase. u have acknowledged to accept their request but however not agreeable to their down payment term

i believe that you have yet to process the order without first receiving the down payment from the buyer. correct me if i'm wrong

more importantly have u invoiced the buyer for this PO? have u incurred any costs due to this order? if yes, u may write a demand letter but do note that you need to provide / enclose the invoice and also acknowledgment of receipt of goods as evidence of goods delivered and received, or such other evidence detailing your costs and expenses already incurred

do look at your current case in isolation with past POs
i understand yes the buyer had received your invoices for previous POs and these remain outstanding, but these are considered as different transactions. u may initiate collection and recovery processes for sums overdue if u so wish


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