Payment Terms Scenario:


"Consider the following scenario: A vendor provides a quote for products and services selected and customized based on the customers needs. This quote is provided to all customers regardless of payment terms. The vendor does not have the customer sign the quote to accept the terms and conditions of their quote. This quote outlines software licensing.

The vendor insists that customers using POs clearly state on their PO that they accept the terms and conditions of the quote – the customer PO is rejected if it does not contain this verbage, yet on prepaid or credit card deals there is no acknowledgement of acceptance of terms and conditions as outlined on the quote. The order is immediately processed upon receipt of prepayment.

It appears that the vendor is only safeguarding their terms and conditions with those sales where a customer has provided a PO. My suggestion was to have all customers sign the quote to acknowledge agreement as a stop payment on a check or credit card dispute could arise leaving the vendor in a situation. I am being told that this is not necessary because the last document standing covers the vendor on the terms and conditions. Logically this does not make sense to me and I am hoping you can provide me with a resource for better understanding."


Your question has more legal ramifications on how to handle disputes. This is generally governed by Uniform Commercial Code (UCC) regulations and your state's business practices where you are incorporated. Some thoughts:

  • Some companies provide an invoice with the terms and conditions stated on the invoice. This way when a customer pays the invoice whether by check or credit card they have implicitly agreed to the terms. However, keep in mind there are exceptions based on each situation.
  • As you have suggested, some companies may still require the customer to return a signed quote before they ship product or begin their services, even though the customer has pre-paid some portion of the quote.
  • In the quote document you could put language indicating that any pre-payment by whatever method (check, credit card, ACH, wire....) would be considered acknowledgement of accepting the terms and conditions of the quote.

We encourage you to seek the advice of your legal advisor since they are familiar with your business practices, industry, and your state's governing business regulations. Each state can have different rulings depending on the jurisdiction.

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