Guide
When Your Purchase Order and the Supplier's Quote Disagree, Whose Terms Win?
Whose terms win is the question U.S. sales law answers in UCC section 2-207, the battle-of-the-forms rule, when a purchase order and a supplier's quote or order acknowledgment say different things. The short answer: a reply with different terms can still form a contract, and between merchants the supplier's added terms become part of it unless your purchase order limited acceptance to its own terms, the added terms materially alter the deal, or you objected. The usual protection is to limit acceptance and object in writing before production starts.
By Saola Manufacturing engineering team · Published · Updated
General information, not legal advice. Contract law varies by state and by the facts; have counsel review your purchase order terms and any dispute.
This guide is for a buyer who has issued a purchase order for machined parts and then received an order acknowledgment that adds warranty limits, delivery language or a cancellation fee that was never in the PO. It explains the default rule in plain language, shows which supplier-added terms deserve a closer look, and gives a checklist for what to do when the acknowledgment arrives. It covers U.S. domestic sales law; a purchase from a foreign supplier may fall under the CISG instead, which is cross-referenced below.
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What does UCC 2-207 do when a reply has different terms?
A definite and timely acceptance, or a written confirmation sent within a reasonable time, still counts as an acceptance even if it states additional or different terms, unless the acceptance is expressly made conditional on assent to those terms. A supplier's acknowledgment can therefore close the deal while carrying terms you never agreed to.
That is the text of section 2-207(1) (UCC 2-207, Cornell LII). Section 2-207 is the Code's answer to two forms that do not match. The practical consequence for a buyer is that a contract usually does exist, and the argument is about which terms are in it.
Subsection (3) covers the case where the writings do not form a contract but the parties act as if one exists, for example the supplier ships and the buyer accepts the parts. The contract then consists of the terms on which the writings agree, together with the gap-filling terms the Code supplies. Terms that only one side wrote, and that the other side did not accept, are not automatically part of it. This is why continuing to perform without objecting does not simply hand the supplier its form.
Which of the supplier's added terms become part of the contract?
Between merchants, additional terms become part of the contract unless the offer expressly limits acceptance to its own terms, the new terms materially alter it, or the buyer has objected or objects within a reasonable time. Whether a term materially alters the deal is a question of fact, so treat every added clause as a possible dispute.
The table lists the terms buyers most often find in a supplier acknowledgment, the Code sections that bear on each, and the move that protects you. A term that is added does not automatically stand; some Code sections impose their own requirements before a supplier can limit warranties or remedies.
| Term the acknowledgment adds | What the Code says | Your move |
|---|---|---|
| Warranty disclaimer | To exclude the implied warranty of merchantability the language must mention merchantability and, if written, be conspicuous; a fitness disclaimer must be in a conspicuous writing (2-316) | Object in writing; state in the PO the warranty you require |
| Limit of remedy to repair or replace | A remedy is exclusive only if expressly agreed to be (2-719(1)); consequential damages can be limited unless unconscionable (2-719(3)) | Object; state in the PO that remedies are not exclusive |
| Cancellation or change fee | No section reviewed here; it is an additional term judged under 2-207(2) | Object; cap the charge in the PO or master agreement |
| Delivery dates described as estimates | No section reviewed here; it is an additional term judged under 2-207(2) | Object; state firm dates or an agreed remedy for lateness |
| Price change or surcharge clause | No section reviewed here; it is an additional term judged under 2-207(2) | Object; negotiate an indexed clause instead |
| Governing law or forum | No section reviewed here; it is an additional term judged under 2-207(2) | Object; fix law and forum in the master agreement |
| Order of precedence that puts the supplier’s terms first | No section reviewed here; it is an additional term judged under 2-207(2). For comparison, the federal commercial clause resolves conflicts by its own written order (48 CFR 52.212-4(s)) | Object; set the order of documents in the master agreement |
How do you stop the supplier's terms from coming in?
Say on the face of the purchase order that acceptance is expressly limited to its terms, have the supplier sign a master agreement that overrides any later form, and object in writing to every acknowledgment that adds or changes a term.
Each of the three exceptions in 2-207(2) maps to a step. For the first, the PO should say in plain words that the supplier's acceptance is limited to the terms of the PO and that any additional or different terms in a quote, acknowledgment or invoice are rejected in advance. The statute says the offer must expressly limit acceptance, so fine print on the back is a weaker bet than a clear statement on the front. For the second, avoid depending on the argument that a term is a material change; it is a litigation argument, not a plan. For the third, objection, review each acknowledgment when it arrives and answer in writing.
Sequence matters. If the supplier's quote is itself the offer and your PO is the acceptance, then the quote terms are the starting point and your PO may be the document with the additional terms. Whether a quote is an offer depends on its wording, so read the supplier's quote before you issue the PO and make your PO refer to it only where you mean to accept it. If the quote says it is subject to the supplier's standard conditions, resolve that before you order, not after.
The most reliable fix is a signed master supply agreement that states it supersedes preprinted forms and sets an order of precedence: signed agreement first, then the PO, then the quote. Federal commercial contracts use the same device: the FAR clause for commercial products resolves any inconsistency by a written order of precedence (48 CFR 52.212-4(s)). Purchase orders then release quantities against terms that are already settled. The blanket purchase order guide covers how that structure works for repeat machined parts, and the quality terms that belong in the same package are in the supplier quality agreement guide.
What about changes the supplier asks for after the order is placed?
Under UCC 2-209, an agreement modifying a contract needs no consideration to be binding, and a signed agreement that requires modifications to be in a signed writing generally cannot be changed any other way. A no-oral-modification clause in your agreement is worth having.
Section 2-209(2) adds one condition outside dealings between merchants: where the signed-writing requirement sits on a form supplied by a merchant, the other party must sign it separately. Between two businesses that are both merchants, no separate signature is called for. An attempt at modification that fails these requirements can still operate as a waiver under (4), and a party that waived a term can retract the waiver by reasonable notice unless that would be unjust because the other side relied on it (UCC 2-209, Cornell LII).
The practical lesson for a buyer is not to treat a supplier's email about a new price or a new date as harmless. Reply in writing, say whether you accept, and keep it. If the request is a material surcharge, the way to handle it is a written adjustment clause with a named index and a base month; the mechanics are in the guide on metal price adjustment clauses.
What changes if the CISG governs the purchase?
The Convention uses a stricter rule: a reply that adds or changes terms is a counter-offer, and changes to price, quality, liability or dispute settlement count as material. The parties can exclude the Convention, and which law applies is the first question to settle.
Article 19 of the CISG treats a reply that purports to be an acceptance but contains additions, limitations or other modifications as a rejection and a counter-offer; minor changes can still be an acceptance unless the offeror objects without undue delay, and terms relating to price, payment, quality and quantity, place and time of delivery, extent of liability or the settlement of disputes are considered to alter the offer materially (CISG text, UNCITRAL, 2010). When the supplier has its place of business in Viet Nam, the Convention generally applies by default unless excluded, and where it applies it takes the place of the 2-207 analysis above. Which law governs, how to exclude the Convention and the effect of Viet Nam's writing declaration are in the guide on the CISG and a Vietnamese supplier.
What should you do when an acknowledgment arrives with extra terms?
Compare it to the PO line by line, object in writing before production starts, and ask for a corrected acknowledgment. Escalate to counsel if parts have already shipped on the disputed terms.
Check these items against the PO: warranty and disclaimer language, limits on remedies, cancellation and change charges, delivery dates, any price-change wording, governing law and forum, tooling and fixture ownership, and confidentiality. For each difference, either accept it in writing, if it is acceptable, or reject it in writing. Do not leave a difference unanswered on the theory that silence is neutral; subsection (2)(c) is built around timely objection.
If production has begun and the dispute is about a clause that only matters on a failure, such as a remedy limit, say so in your reply and reserve your rights. Do not wait until a bad lot arrives to read the acknowledgment.
When you send an RFQ to Saola for CNC turning or CNC milling, include your PO terms or a draft master agreement with the drawing so the terms are discussed before the quote. Use the quote page to send both.
Frequently asked
Is a supplier's quote an offer I can accept with a PO?
It can be, depending on its wording. A quote that is specific and invites acceptance may be an offer, in which case your PO is the acceptance and the quote terms lead. Ask counsel about quotes that say they are subject to the supplier's conditions.
Do terms printed on the back of my PO protect me?
They help less than a clear statement on the front. Section 2-207(2) looks for an offer that expressly limits acceptance to its own terms, so state that limit prominently on the face of the PO.
What if I accepted a shipment without answering the acknowledgment?
Subsection (3) allows a contract by conduct and builds it from the terms on which the writings agree plus Code gap-fillers. Object in writing now and ask counsel about the terms that were in conflict.
Can a supplier disclaim warranties in an acknowledgment?
The Code sets conditions: the disclaimer must mention merchantability and be conspicuous, and a disclaimer of fitness must be in a conspicuous writing (2-316). Whether the disclaimer becomes part of the contract is still decided under 2-207.
Does this apply to a purchase from a Vietnamese supplier?
Possibly not. The CISG applies by default between a U.S. company and a company with its place of business in Viet Nam unless excluded, and its reply rule is stricter. See the cross-referenced guide.
Sources
- UCC 2-207, Additional Terms in Acceptance or Confirmation, Legal Information Institute, Cornell Law School, accessed 2026
- UCC 2-209, Modification, Rescission and Waiver, Legal Information Institute, Cornell Law School, accessed 2026
- UCC 2-316, Exclusion or Modification of Warranties, Legal Information Institute, Cornell Law School, accessed 2026
- UCC 2-719, Contractual Modification or Limitation of Remedy, Legal Information Institute, Cornell Law School, accessed 2026
- FAR 52.212-4, Contract Terms and Conditions: Commercial Products and Commercial Services, paragraph (s) Order of precedence, Acquisition.gov, clause dated November 2023, accessed 2026
- United Nations Convention on Contracts for the International Sale of Goods (full text), United Nations Commission on International Trade Law, New York, 2010