CUL 129 CHAPTER 6

Express Contract

A contract in which the components of the agreement are clearly understood and are stated orally or in writing

Enforceable (Contract)

A contract that is recognized as valid by the courts and is, therefore, subject to the court's ability to require compliance with its terms

Purchase Requisition

A document used to inform the purchasing staff that more products need to be ordered

Contract

A legally enforceable agreement or promise

Bid

A price quotation from a vendor

Ordering

A process that occurs when a purchaser makes a commitment to a vendor relating to a specific purchase

Offer (Contract)

A proposal to perform an act or to pay an amount that, if accepted, becomes a legally valid contract

Backorder

A situation that occurs when a vendor does not have the products required to fill a purchaser's order

What refers to an agreement to the exact details of the offer?

Acceptance

Trade out

An agreement between two businesses in which the contract's consideration is not in the form of money

Acceptance (Contract)

An agreement to the exact details of an offer

Counteroffer

An offer made in response to another offer that was not acceptable

What refers to the situation in which a vendor does not have the products required to fill a purchaser's order?

Backorder

What is the purpose of a purchase order?

Confirmation of acceptance of order details

What refers to payment to be made in exchange for the promise in the contract?

Consideration

Boiler Plate (Contract Language)

Contract clauses that do not change even though the contracts are developed for use with different vendors selling different products

If an offer is not accepted, what strategy might be employed?

Counteroffer

What refers to a contract recognized as valid by the courts?

Enforceable

Terms and Conditions (Contract)

General provisions that apply to a vendor's responses to RFP's and a purchaser's purchase orders regardless of the specific products being sold or purchased

What part of the contract agrees that the product will be free from defects and conform to specifications?

Guaranties and warranties

What differentiates a contract from another agreement?

It can be enforced in court

How can technology assist in ordering products?

It maintains an ongoing count of inventory

What part of the contract specifies how the purchaser will recover damages if the vendor fails to perform?

Legal remedies

Why are written contracts the preferred form of contract?

Memories can differ and dim over time

Who is responsible for failure to perform in case of fire, flood, or labor difficulties?

Neither purchaser or vendor

Which is the most important step in the purchasing process?

No single step is more important than any other

What can the purchaser gain by "managing by walking around"?

Observe procedures and discuss challenges

What refers to a proposal to perform an act or pay an amount?

Offer

What ordering procedure do smaller operations always share with larger ones?

Ordering document always required, as it helps authorize payment

How is ordering handled in a small-volume operation?

Owner or department heads order their own supply up to a pre-established price limit

What strategy might be employed if a vendor fails to deliver the quality of product ordered due to back order?

Purchase from another approved vendor

If a vendor has not delivered the quality specified, at what point in the operation should this have been discovered?

Receiving

How can the vendor's website assist the purchaser?

Review previous orders, place orders, and note current prices

Consideration (Contract)

The payment to be made in exchange for the promise contained in the contract

What concern needs to be addressed when a bidding vendor offers a much lower price than other bidders?

The product is of a different quality or services are excluded

What would be the disadvantage of using more than one vendor based on the lowest price per product quoted?

Time and expense of interacting with more than one vendor

Expedite

To perform activities that hasten the delivery of products that have been ordered but not yet received

What might occur within an operation that requires a purchaser to expedite an order?

Unexpected volume creating unexpected need