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The Legal Aspects of Purchasing Powerpoint

The document discusses the legal aspects of purchasing, including: 1) A purchasing manager acts as an agent for their firm and is responsible for procuring materials, supplies, and services while representing the principal in contract negotiations. 2) For a contract to be valid, the parties must have capacity and reach mutual agreement through a legitimate offer and acceptance regarding a legal subject matter. 3) Purchasing managers can legally commit their company when contracts show the principal, all parties understand the purchasing agent is acting on behalf of the company, and the agent operates within the scope of their authority.

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Michael Zuniga
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968 views13 pages

The Legal Aspects of Purchasing Powerpoint

The document discusses the legal aspects of purchasing, including: 1) A purchasing manager acts as an agent for their firm and is responsible for procuring materials, supplies, and services while representing the principal in contract negotiations. 2) For a contract to be valid, the parties must have capacity and reach mutual agreement through a legitimate offer and acceptance regarding a legal subject matter. 3) Purchasing managers can legally commit their company when contracts show the principal, all parties understand the purchasing agent is acting on behalf of the company, and the agent operates within the scope of their authority.

Uploaded by

Michael Zuniga
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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The Legal Aspects Of

Purchasing
Purchasing manager
is an agent for the firm. The terms purchasing
manager, buyer, and purchasing agent will be used
interchangeably.
The purchasing function consists of many tasks within the
business entity, including supporting the company with the
required
(1) materials
(2) supplies
(3) services.
The Title and Duties-Purchasing
Agent
The most important task that the purchasing officer is
involved in is representing the principal in the development
and negotiation of contracts with third parties.
The title purchasing agent is a generic legal term.
The Title-Purchasing Manager
Recently, the term has been superseded by vice president of
purchasing, vice president of materials management, and
vice president of supply management.
From a legal standpoint, the term purchasing agent
accurately defines the individual who deals with a third party
for a principal.
Legal Status of Purchasing Manager
1. The purchasing manager must be granted the authority to make
purchase contracts.
2. The purchasing manager accepts this contracting authority.
3. The employer accepts the commitments that were made by the
purchasing manager.
Execution of Contracts and Purchase Orders
Purchasing personnel routinely sign purchase orders and contracts committing the company to
the specific terms and conditions of purchase orders and contracts. The purchasing official has
no personal liability providing that the following requirements are met:

1. The name of the principal or company is shown on the document.


2. All parties involved know that the purchasing agent is acting on behalf of the
company or principal.
3. The agency relation is shown on the document.
4. The purchasing agent is acting within the scope of his or her authority for the
transaction.
Essentials of a Purchase Contract
1. The parties must be capable
2. The subject of the matter must be legal and valid
3. There must be mutual agreement
4. The parties must reach an agreement by offer and
acceptance.
Offers
Purchasing agents receive numerous offers on a daily basis and must
be able to identify complete legitimate offers. The three necessary
components of an offer are:

1. Intent to make an offer


2. Communication of the offer intent
3. Identification of the specific subject matter
Invitation To Do Business
In most instances, the purchasing official initiates an
invitation to do business. The purchasing official issues a
request for quotation.
The RFQ is an excellent way for the buying firm to test the
market without making a legal commitment to purchase.
The RFQ lacks the intent component. When the intent
component is missing, the document is merely an invitation
to bid.
Counteroffers
The negotiations process between the buyer and the
seller usually leads to many offers and counteroffers.
A counteroffer is legally binding if it contains the
components that institute an offer.

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