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last updated: 29th July 2011

All purchase orders must be accurately priced - no one would use blank cheques for their own expenditure and the institution's funds can be treated no less prudently. Generally speaking, the purchase order or signed contract sets the terms of the contract between the institution and the supplier. 

Example
A purchase order to a supplier states that the institution wishes to purchase a widget for £100.  The supplier accepts the order and provides the product, then invoices the institution for the £100.  If the actual price of the item was only, say, £60 the supplier may choose to invoice it at £60, however the supplier is within its legal rights to invoice at the £100 as stated on the official purchase order.  In legal terms, under law of contract, the institution using the purchase order has offered to buy the product for £100, the supplier accepted the offer and delivered the goods at the price the institution was prepared to pay ie the £100 - regardless of its 'true' price.
 

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