Take our scenario and go back to the beginning. Your company sees a marketplace need for a product with a unique, custom-designed component. You're asked to bring in a supplier that can work with engineering to develop and manufacture the special component. Everything goes along fine for 6 months - just like many other projects involving suppliers with your business. Then slowly it loses momentum.
Marketing goes in a different direction and the development project is killed.
You had a purchase order to pay the supplier for development work leading to some prototypes. The work was done, the prototypes were received at your company and the supplier was paid. The project is halted and the supplier is told there will be no production because the component isn't needed as previously forecast. One month later, the supplier begins pushing you for additional funds as a result of the cancellation. You insist that the supplier was not authorized to commit additional investment and advise that the purchase order terms were explicit in every regard.