Which sequence best describes the path to a binding contract?

Which sequence best describes the path to a binding contract?

• A. Purchase Requisition followed by Purchase Order and Supplier Confirmation of PO
• B. Purchase Requisition
• C. RFI
• D. Contracting

Answer: (A)

Seeking a binding contract in procurement starts with the internal request to obtain goods or services, a purchase requisition. This requisition alone does not bind any supplier—it just signals what is needed. The formal buyer’s offer comes with a purchase order, which sets out the terms, price, and delivery expectations. The contract becomes binding when the supplier explicitly confirms or accepts that purchase order, agreeing to those terms. At that point there is mutual assent and a legally enforceable contract. The other paths don’t lead to a binding agreement on their own: a requisition by itself is only internal; an information-gathering step like an RFI does not create obligations or terms to be accepted; and contracting in isolation describes negotiating activities rather than the moment a binding contract is formed, which requires supplier acceptance of the purchase order.

Seeking a binding contract in procurement starts with the internal request to obtain goods or services, a purchase requisition. This requisition alone does not bind any supplier—it just signals what is needed. The formal buyer’s offer comes with a purchase order, which sets out the terms, price, and delivery expectations. The contract becomes binding when the supplier explicitly confirms or accepts that purchase order, agreeing to those terms. At that point there is mutual assent and a legally enforceable contract.

The other paths don’t lead to a binding agreement on their own: a requisition by itself is only internal; an information-gathering step like an RFI does not create obligations or terms to be accepted; and contracting in isolation describes negotiating activities rather than the moment a binding contract is formed, which requires supplier acceptance of the purchase order.