Quotation and Purchase Order (PO) Do Not Match: Which Terms Govern?

The seller sends a quotation. The customer replies with a purchase order (PO), but the figures differ: the price is lower, the delivery date is earlier than offered, there is a penalty clause the quotation never mentioned, and the back of the PO carries a page of general purchase terms. The factory has already ordered materials. When delivery time comes, the customer points to its own document. Which document made the contract?

This happens constantly in business-to-business trade, because each side uses its own forms and work often starts before anyone compares them. This guide explains the rules of the Civil and Commercial Code on which document forms a contract, how price, delivery date, penalties and fine print are treated, and how to check before work begins. If a large customer has sent you a full contract, see the guide on checking a large customer's contract before an SME signs. If the deal was made by chat or by word of mouth, see whether verbal contracts are enforceable.

The core answer

Neither document wins automatically. A contract arises when offer and acceptance match on every essential point. The quotation is usually the "offer" and the PO the "acceptance", but if the PO changes an essential point it is not an acceptance. It is a new offer that the seller must accept, and until the seller accepts, in words or by conduct, the PO terms do not fully bind the seller and the quotation contract has not arisen either.

The law. Civil and Commercial Code Section 359 paragraph 2 treats an acceptance that adds to, limits or alters the offer as a rejection and a new offer in one. Section 361 paragraph 2, on acceptance by conduct, says that where by the offeror's intention or by ordinary usage no notice of acceptance is needed, the contract arises when an act takes place from which acceptance can be inferred. Section 366 deals with a term that a party has declared essential and that must be agreed on every point; until it is agreed, the contract does not arise. Section 368 requires contracts to be read in good faith with regard to ordinary usage. Section 11 construes doubt in favour of the party who would bear the obligation, and Section 5 requires good faith in exercising rights and performing obligations. Penalty clauses fall under Sections 379 to 383.

Our practical view. Do not treat the later document as an administrative formality. Treat a PO that does not match the quotation as a new offer until shown otherwise, and decide before work starts whether to accept it, negotiate or decline. The usual mistake is to start production or ship before the conflict is closed, because that conduct may be read as accepting the customer's terms. When two documents conflict, stop and send a confirmation message first.

Hypothetical. A small wooden-furniture maker in Khon Kaen (the "Wood Shop") offers a hotel 120 sets of room furniture. The quotation says 1,850 baht per set, delivery within 45 days, half paid on confirmation and the rest on delivery. The hotel's PO says 1,750 baht per set, delivery within 30 days, and a penalty of 0.1 percent of the order value for each day of delay. The back of the PO says payment is due 90 days after acceptance of the goods and that the buyer may deduct penalties from any payment. The Wood Shop has already ordered timber and has not replied to the PO.

1. Is the quotation an offer or only an invitation?

Not every quotation is an offer. A quotation that names the goods, quantity, price and terms clearly enough for the customer to accept as it stands, and that has a validity period, is usually an offer that binds the offeror. A quotation marked "estimated price", "price subject to change" or "subject to stock confirmation" may only invite the customer to make its own offer. In that case the PO is the offer and the seller's reply to it is the acceptance.

So write in the quotation: "This offer is valid until ____. A contract arises when the seller confirms the order in writing." Wording like this stops a PO from closing the contract on its own before the seller has replied.

2. A PO that changes the terms: acceptance or a new offer?

Section 359 paragraph 2 is the heart of the matter. An acceptance with additions, limits or other changes is treated as a rejection and a new offer. A PO that states a lower price, an earlier delivery or a new penalty clause therefore does not create a contract on the quotation terms, and does not create one on the PO terms either, unless the seller accepts.

In the hypothetical, the hotel's PO changes the price, the delivery date and the penalty, so it is a new offer. The Wood Shop is not yet bound by its quotation or by the PO until it replies. It has three choices: accept the PO as it stands, reply with its own terms (which is a new offer in turn), or decline. The choice should be deliberate, because staying silent and starting work may not produce the result the seller expects (see Section 5).

A note on triviality. If the PO changes only a minor detail, such as adding the customer's internal document number, a court may look at intention and circumstances and find an acceptance. But price, quantity, delivery date and penalties are essential terms of nearly every sale, and you should not hope they will be treated as minor. Section 366 also means that if a party has made clear that a term is essential and must be agreed, there is no contract until it is agreed, which is why both sides should clear the essential points before goods move.

3. Price and delivery date: which figure applies?

Price and delivery date are the two most important terms. If the documents disagree, do not simply choose the figure that favours you. Work through these steps.

1. Has a contract arisen? If the seller has not accepted a PO that changes the figures, the quotation price is not yet agreed, and the PO price does not yet bind either.
2. Whose document did the seller accept? If the seller replies "confirmed per PO no. ____", the PO figures apply. If the seller replies "confirmed per quotation no. ____", that is a new offer the customer must accept.
3. The surrounding documents. Emails, chats, meeting notes and the parties' earlier dealings may help interpret intention under Section 368, which requires reading in good faith and with regard to ordinary usage.
4. Any remaining doubt. Section 11 construes doubt in favour of the party who would bear the obligation, for example a buyer who must pay the price. This is a last resort and should not be relied on in planning.

For delivery, check both the date and where the clock starts. "30 days from the date of the PO" is very different from "45 days from receipt of the deposit and approved drawings". If the buyer revises the design or is late with information, the period should move accordingly, and that must be written down beforehand, not argued at delivery. The consequences of late delivery are in Section 4.

If the cost of materials changes while you wait for the PO, see the guide on asking for a price adjustment when raw material costs rise.

4. Penalties and deductions: when do they bind, and can they be reduced?

A penalty clause that appears in the PO but not the quotation is the riskiest case, because buyers often use it to deduct from payment when delivery is late. Consider these points separately.

• Is the penalty clause part of the contract? If the seller has not accepted the PO, the clause does not yet bind. If it has accepted, the clause is a penalty under Sections 379 to 383.
• Is it disproportionately high? Section 383 allows the court to reduce a disproportionately high penalty to a reasonable amount, looking at the creditor's whole interest and not only the actual loss. Do not assume that a reduction is available in every case; it depends on the facts and the court's discretion.
• Must the buyer reserve the claim on accepting the goods? Section 381 paragraph 3 provides that a creditor who accepts performance must reserve the right to claim the penalty at the time of acceptance. The seller should look at whether the buyer took delivery without objection or reservation.
• Can the buyer deduct it from the price? Deducting from the price is a question of set-off under Sections 341 and 342, and Section 344 does not allow set-off where a claim is still open to a defence. So check whether the penalty debt has actually arisen and is not disputed.

This is covered further in the guide on a customer deducting penalties or damages from payment. If the buyer simply does not pay, see unpaid invoices from business customers.

In the hypothetical, if the Wood Shop accepts a PO with a penalty of 0.1 percent a day and delivers ten days late, the hotel's calculation and deduction still need checking: what the figure is based on, whether there is a cap, and whose fault the delay was, for example if the hotel changed the design midway.

5. Fine print and conduct that signals acceptance

The small print on the back of a PO or quotation ("general terms of purchase" or "general terms of sale") causes trouble because each side often has its own, and they conflict, for instance one gives jurisdiction to the courts where it is based and the other limits liability. The principle is that fine print binds when the other side has actually agreed to it, not merely because it is printed.

Conduct that may be treated as acceptance. Section 361 paragraph 2 lets the contract arise when an act takes place from which acceptance can be inferred and no notice of acceptance is needed. Acts that are commonly relied on include:

• starting production or ordering materials specifically for the job after receiving the PO
• delivering to the address and by the date in the PO
• taking a deposit or first payment that quotes the PO number
• opening a customer account or issuing an invoice that quotes the PO number

A seller who does these things without any reservation risks the other side arguing that it accepted the whole PO, including the penalty and the fine print. That does not mean a court will always read it that way. It will look at what the parties wrote to each other, how they usually deal, and whether the seller objected to any term.

How to reduce the risk. Before starting, send a reply that states clearly which terms the seller accepts and which it does not, and ask the customer to confirm. A sample is in Section 6.

When both sides' documents conflict in full. Sometimes each side sends documents with different fine print and both start work. There is no ready answer. The outcome turns on intention and circumstances, the points that do match, the essential terms such as goods and price, and ordinary usage under Section 368. General terms that conflict but are not essential may not be treated as agreed. So do not let it get that far; close the essential points early.

6. Pre-start conflict check: table, confirmation message, signatory

Do three things before ordering materials or starting production.

A. Make a comparison table. Put the two documents side by side and complete the "which applies" column.

B. Send a message confirming the terms that will apply. Before starting, send a summary the seller accepts and say which document's fine print does not apply. Ask the customer to reply. Electronic messages are effective because Electronic Transactions Act B.E. 2544 Section 7 does not deny legal effect to a message only because it is in electronic form. For electronic signatures, see electronic signatures in company contracts.

Dear Purchasing Department, Hotel ____
Regarding your purchase order no. ____ dated ____ and our quotation no. ____ dated ____, which do not match,
the Wood Shop confirms the terms that will apply to this order:
1) Price: ____ baht per set (including / excluding VAT), ____ sets
2) Delivery: within ____ days from receipt of the deposit and approved drawings
3) Penalty for late delivery: ____ per day, capped at ____ percent of the order value, and not charged for delay caused by the buyer
4) Payment: ____
5) Any fine print on the PO or the quotation that conflicts with 1) to 4) above does not apply.
The Wood Shop will start work when an authorised person at the hotel replies "Confirmed as above".
Until we receive that confirmation, the Wood Shop has not accepted the purchase order.

C. Have an authorised person confirm. Check who signed the PO and who accepts for the seller. A purchasing clerk or a salesperson may lack authority to bind the legal entity for a large order. A limited company is bound by the directors with authority as registered. Ask for a power of attorney or the list of authorised signatories for large orders, and set up your own internal process following the guide on a contract review and approval process without a legal department.

For movables priced at 20,000 baht or more, Civil and Commercial Code Section 456 paragraph 3 requires signed written evidence from the party to be held liable, a deposit, or part performance, so keep the PO, the acceptance and the confirmation message together. If the buyer will not sign off the work, see when a customer will not sign acceptance and you cannot invoice, and for extra items ordered over LINE see evidence for extra work ordered via LINE.

7. If work has already started and the documents still conflict

If work has started, follow this order.

1. Stop adding risk. Do not deliver more until a confirmation is sent, or at least send a reservation message with the delivery.
2. Collect the evidence. The quotation, the PO, all messages, the start date, material orders, delivery notes and every exchange.
3. Identify the conflicts and what the other side has already accepted. For example, the customer paid a deposit at the quotation price.
4. Propose a new agreement. Customers often agree to change when they see the real costs.
5. If it becomes a dispute, send a notice and keep proof of sending, and consult a lawyer before delivering or deducting.

The consequences of picking the wrong document can be very different. In some cases no contract has arisen, in others the contract is on the customer's terms. The assessment depends on all the facts and, in the end, on the court's discretion.

8. Checklist before starting work with a quotation and a PO

Documents and messages

• The quotation states a validity period and says the contract arises when the seller confirms in writing
• The quotation and the PO are compared point by point in a table
• The fine print on the back of both documents has been read, not only the first page

Price, time and penalties

• Price, tax and freight match, or a message confirms which figure applies
• Delivery date and starting point match, with an exception for delay caused by the customer
• The penalty clause has a rate, a cap and a start condition that are acceptable
• It is stated whether the customer may deduct penalties from payment, and how it must give notice

Confirmation and signatory

• A message confirming the terms that will actually apply was sent and a written reply received before work started
• The customer's confirming person has authority, and our side has gone through internal approval
• It is clear which document's fine print does not apply

Conduct before confirmation

• No order-specific materials, no production, no delivery and no deposit quoting the PO number until confirmed
• If work must start first, a reservation message goes out with it
• The PO, messages and proof of delivery are kept together in one file

Further reading

• Checking a large customer's contract before an SME signs: when the customer uses its own contract instead of a PO
• Are verbal contracts enforceable?: when some terms come from conversation
• Electronic signatures in company contracts: confirming terms by email or chat
• A contract review and approval process without a legal department: who should sign and what to check
• Unpaid invoices from business customers: when the customer does not pay on time
• A customer deducting penalties or damages from payment: when the buyer deducts under a penalty clause
• Raw material cost increases and price adjustment: when costs change while awaiting confirmation

A quotation and a PO that do not match do not mean you are at a disadvantage, but the essential points, price, delivery date and penalties, must be fixed clearly in writing before work begins.

We help compare quotations and POs, draft messages that confirm the governing terms, prepare quotation forms and terms of sale that handle this situation, and advise when a dispute arises over penalties or deductions. For an initial consultation, call +66 92 254 2045 or send us the details. See also contracts and business documents.

This guide is published by Suwanvara Law Firm — a Khon Kaen law firm established in 1986. General information only, not legal advice on a specific matter.