The Legal Aspects Of Purchasing.

A key management decision with important legal branch is the level of delegated authority or discretion granted to purchasing staff , are they responsible for routine purchases only or do they control the acquisition of all the company's requirements? This will generally depend on the nature of the goods purchased, levels of available expertise and the degree of autonomy and centralisation of the purchasing function. Other factors to consider include the following:

1.     Authority Limits: It may also be advisable to establish the types of commitment and pre-set financial limits that individual staff are permitted to enter into, with or without a counter-signature or approval from their manager.

2.    Awareness of Contract Law: Purchasing staff should be made aware of the legal issues likely to arise routinely as part of their jobs, especially contract law, and in particular how and when the company may be legally bound and how contracts may be varied or terminated. Training in such areas should be considered.

3.    Quality and Safety: As part of your risk management procedures, you should ensure that only reputable suppliers are selected; that such suppliers comply with their obligations to you under health and safety laws to provide and update safety information for substances and industrial products  and that they cooperate with you generally in your risk management and quality initiatives with respect to customers, employees and others. Such cooperation can be reinforced by including contractual obligations in your purchasing documentation.

4.    Monitoring Supply Contracts: If you have many suppliers, it will be necessary to allocate responsibility for ensuring that purchase or performance levels, ordering requirements and deadlines,  thresholds, contract dates, renewal, notice and termination dates and other contract parameters are monitored and complied with.

5.    Letters of Intent: It is common for goods or services to be provided before formal contractual arrangements have been concluded. In such circumstances, one party may request a letter of intent. Practically, this may be unavoidable but such arrangements can be dishonest, advice should be taken as to the precise wording of letters of intent that you do not become contractually committed before you mean to.

6.    Tenders: If many project is involved, you may consider seeking a competitive tender. An important consideration here is the legal status of a tender especially as to whether you are bound to accept the lowest tender. Going to tender may also mean that expert advice is necessary to assist in terms of drafting the tender specification and the comparison of the bids received which may well have been put together on differing bases.

The purchasing manager is an agent for  the firm. The terms purchasing manager, buyer, and purchasing agent will be used interchangeably. The purchasing manager administers the purchasing function. The purchasing function consists of many tasks within the business entity, including supporting the company with the required materials, supplies and services.

The title and duties purchasing agent in the legal of purchasing is the most important task that the purchasing officer is involved in is representing the principal in the development and negotiation of contracts with third parties. The title purchasing agent is a generic legal term. Recently, the term has been take place by vice president of purchasing, vice president of material management, and vice president of supply management.