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What constitutes a binding contract?

Asked over 2 years ago - Rancho Cucamonga, CA

I own a small company, and one of my suppliers has a written policy that requires a 30% deposit to begin any and all PO's. I have dealt with them for 2 years, and they have always followed this policy, and have never indicated there was any change. A few months ago I emailed them a PO but did not send a deposit becasue money was tight. I then cancelled the PO two months after submitting it. They have now said they decided my credit was good so they processed the order anyways, it is ready, and they expect me to pay for it. Am I obligated to pay for this order? Is my written PO more legally binding than their written policy?

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Attorney answers (3)

John M. Kaman

Reputation Level 20

Answered over 2 years ago. Criminal Defense Attorney in San Francisco, CA.

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In my opinion you are obligated to pay. Your specific order would override their written policies if they chose to fill it (after all it's their policy which is in question, not yours). Then in reliance on your PO they processed the order. It would be unjust to let you cancel the order after your supplier has done all the work at your request to fill it.

John M. Kaman

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Steven Alan Fink

Reputation Level 20

Answered over 2 years ago. Contracts / Agreements Lawyer in Newport Beach, CA.

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The issue is whether they made the order specially for you or if this was just pulled out of inventory. Specially made, you owe them. Out of inventory, you can tell them you cannot afford to pay for order and are cancelling it. It may come down to the language in your forms and theirs re cancellation.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change.

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Pamela Koslyn

Reputation Level 20

Answered over 2 years ago. Business Attorney in Los Angeles, CA.

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You're obligated to pay for this order. You knew they'd waive the deposit requirement, otherwise you wouldn't have had to cancel the order, you'd simply just not send the deposit.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

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