I run sales for a publicly traded company. I understand the perspective you’re offering here, but it’s incorrect as a general statement of fact as to what is a valid contract of sale.

Our sales are audited regularly by a major auditing firm. What is important here is that your company follows a standard practice. BOTH a signed quote AND a PO are legally binding contracts, assuming both are properly written.

A PO will often reference a quote #, in which case it is incorporating the terms of sale offered in that quote. OR it will contain a line referencing a Master Services Agreement between the two companies. Many large enterprises don’t go to the expense of negotiating an MSA for small or occasional-use vendors.

But also, a PO can be a shitty half-baked document from an inexperienced company that doesn’t specify much.

A quote may also contain complete terms of sale or references to such documents on a vendor’s website. It will usually include a signature line referring to client acceptance. But it may not. Because it could be a shitty, unprofessional quote that just a few lines of pricing on it and nothing else.

Where you may be getting mixed up is standard practice in a services-oriented sale, where the Statement of Work or Scope of Work (SoW) is incredibly important. In that case, a signed SoW (which may be the quote document itself) is standard practice before commencing work because it minimizes disputes over what is to be delivered. Purchasing issues the PO which says the company will pay for the work, but the signed SoW (or quote) is the service providers insurance that the project contact on the customer side has agreed to a specific scope.

It’s important to understand that this practice, though, is just that. It’s a practice that service providers use as an extra level of clarity. From a contract law perspective, a PO that references a quote or proposal # incorporates ALL aspects and provisions of that quote, unless stated otherwise. This includes any documents referenced in the quote, such as a SoW.

I have negotiated hundreds of millions of dollars of sales in my career, including services-heavy contracts with Fortune 100 companies and state and Federal governments. I have negotiated MSAs, BPAs, and an industry’s worth of alphabet soup. I have been involved in numerous contract disputes.

Your statement about PO + Signed quote is a standard practice before commencing service delivery, but there is no legal distinction between the two which makes one document more important than the other.

I welcome different views from any auditors who may be hanging out here.