What is Purchase Conditions?

Most commercial relationships exhibit an asymmetry in terms and conditions: the supplier sends its general terms of sale, while the buyer rarely has its own purchasing terms. The result is that in disputes, the supplier's terms serve as the default — complete with all the liability caps, retention of title provisions, and dispute resolution clauses the supplier has drafted in its own favour.

General purchase conditions reverse that position. The buyer sets the rules: which law governs the agreement, which court or arbitrator has jurisdiction, what payment terms apply and in whose favour, how conformity and warranty are regulated, and what liability rules govern the supplier's obligations.

A standard set of purchase conditions typically covers: governing law and jurisdiction, payment terms (commonly 30 to 60 days in favour of the buyer), conformity requirements and warranty obligations, the supplier's liability for breach, intellectual property ownership for custom products or software, and termination rights.

The battle of forms arises when both parties refer to their own terms and conditions. Most legal systems resolve this by giving primacy to the first set of terms introduced — unless the other party explicitly rejects them. This makes it critical to reference your purchase conditions in the first order or enquiry and to expressly reject the supplier's terms at the same time.

For SMBs that regularly purchase from multiple suppliers, developing a standard set of purchase conditions is a one-time legal investment that pays dividends on every subsequent contract.

Purchase conditions are one of the most underutilised legal tools available to SMBs. A business without purchase conditions automatically buys on the supplier's terms — including all the protections the supplier has built in for its own benefit.

With your own purchase conditions, you set the rules. In practice, this can mean longer payment periods in your favour, broader supplier liability for defects, better warranty terms, and fewer opportunities for the supplier to unilaterally adjust prices or exit the contract.