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Jayanta Bandyopadhyay   01 May 2021

Definition of effective date in purchase order

We write one purchase order for One roll worth Rs.1 crore. Subsequently  ,change of order is issued to include some more high value items worth Rs.5 Crores. Supplier to give all supplies together. Effective date of purchase order will be : acknowledgement of last change of order as this is single supply. Not the first one.p

Pl confirm whether my concept is correct one. As there is Late supply related penalty and it is single consolidated supply





 6 Replies

Trivendra Kumar Sharma (Practicing Lawyer)     01 May 2021


As per Indian Contract Act, your interpretation is correct. However much depends of customs of specific trade in relevant area and all other terms of contract.

Trivendra Sharma

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     02 May 2021

The ultimate point of performance depends upon the availability of the items ordered through the Purchase Order. Initially a Purchased Order is made and the effective date for the items mentioned therein shall be from that date. In case a modification is made and additional items are included, the seller has to make a fresh attempt to procure the items. It is not fair to stick to the previous date of the PO and say it should be performed within the period mentioned therein.


"...As there is a Late supply-related penalty and it is a single consolidated supply..." By this you mean to say that the supplier supplied all the articles ordered in the first order and modified the order together and going by the effective date, the items of the first order were supplied with delay. 


It all depends upon how the modification is made and whether any mention is made to supply the items of the first PO first and the items now included with effective date of the modified order. Both documents need to be examined.


Real Soul.... (LEGAL)     02 May 2021

acknowledgement of last change of order as this is single supply. --- you are correct as the PO is binding contract only after it is acknowledged and accepted . The date of acceptance shall be effective date .


munaga rao   02 May 2021

Both are correct 

Dr J C Vashista (Advocate)     02 May 2021

The purchase order is in two parts, which has been accepted / acknowledged on two different dates / occasions despite the fact that supply is consolidated.

Accordingly effective date shall be on the dates the purchase order was accepted by supplier., which is prior to the subsequent supply order for Rs. 1 crore, which was original / un-amended.

 No relevance with supplementary / additional / subsequent supply order of 5 crore qua date of initially accepted order. 

T. Kalaiselvan, Advocate (Advocate)     02 May 2021

If both the supplies are to be counted against a single purchase order, then the latest purchase order may prevail over the previous purchase order and the effective date of placing the purchase order shall be counted from the date of the latest purchase order. 

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