contracts, freelancingI have just started freelancing as a software developer.
I have just signed my first client. This was my first business contract negotiation and it was anything but smooth, and did not end up close to what I wanted.
I have little practical background in business. I had realised that I would need to create a contract stipulating the terms of payment after my quote was accepted. (In hindsight maybe this should have been specified sooner) However, before I could send through a contract, the buyer supplied me with a purchase order stipulating that they accepted the quote and various items that specified the terms of payment and delivery. I was unfamiliar with the concept of purchase orders.
I then had to go through the exercise of trying to convert them from a fixed price order to an hourly based “time and materials order”.
I had never seen a purchase order before. So I thought this was abnormal. I thought “Surely I should be the one stipulating these terms to begin with”. So I Googled what a purchase order is and lo and behold it is indeed the buyer that creates the purchase order, not the seller.
Practically speaking at what point should I stipulate a contract with payment and delivery terms? Before I had provided a quote? Together with the quote? And practically how does a contract from the seller typically get amalgamated with a purchase order from a supplier? Maybe these are all the wrong questions and I have gone about this, objectively, incorrectly, and not how the world functions.
I am really confused about trying to mix a buyers purchase order and my (sellers) terms together and what process I should have followed to avoid the disparity in contract expectations. Essentially I would have preferred if he had decided to send a purchase order that is “time and materials”, rather than fixed price. But how do I get what I want if it is typically the buyer who drafts the purchase order. I have included a link in the comments section to the kind of purchase order that I would have preferred.
Additionally are there any books on this topic that explain to me what the process is in the real world? I have no background in business or law or accounting. I am a software engineer.
The simple answer is that you should provide all of your terms upfront. It is your responsibility to ensure that the terms are correct. However, if a company gives you a purchase order it doesn’t mean you have to agree to it. You have the right to negotiate your own terms, and ensure they are included on the purchase order. If the company is unwilling to change the terms, you can simply walk away. There are no legal ramifications if both parties don’t agree on the terms.
In general, a purchase order is used by larger companies. They tend to make all of their purchase orders standard so they are easier to process. So you will get some general pushback, but always stick to your guns. You have to decide if it is worth doing business with this company, or if it is better to walk away.
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