When a purchase order is written in response to an offer by the vendor and is based on acceptable terms and conditions, it becomes a binding contract and cannot be broken by either party so long as both parties honor the terms and conditions of the agreement. To break or cancel the contract requires the consent of the other party. When a purchase order is written to a vendor which is not in accordance with the terms and conditions previously offered by the vendor, it does not become a binding contract unless the purchase order is acknowledged and accepted by the vendor in writing or if shipment is made and accepted.
Most vendors are willing to make reasonable changes to an order without penalty to the purchaser.
Generally, only when a vendor has expended funds for fabricating special equipment or made shipment will a charge be made for changing or canceling an order. A detailed description of the change to be made If a change is acceptable to all parties, a change order will be issued. Copies of the completed change order are distributed to all offices which received copies of the purchase order.