What are the two requirements for a purchase order to be considered valid?

A purchase order is a formal document created by a buyer to authorize a purchase transaction. To be considered valid, it must typically contain specific elements that establish the expectations and obligations of both parties involved in the transaction.

Choosing the second option emphasizes the importance of having clearly defined terms and conditions, which are essential for legal and operational clarity. Terms and conditions provide the framework within which the purchase order operates, ensuring that both parties understand their rights and responsibilities. Additionally, responding to a quote implies that there has been prior negotiation or agreement on the price and other relevant details, further solidifying the validity of the purchase order.

While identifying the contractor and specifying the quantity, as noted in the first option, is important, these elements alone do not guarantee that the purchase order is valid without the overarching terms and conditions detailing the rights and obligations. Similarly, delivery details, payment terms, and signatures may enhance the enforceability of the contract but are not as foundational to its validity as terms and conditions tied to a quote are. Thus, the second option effectively captures the critical requirements for a valid purchase order.