Question
When the buyer importer issues an RFQ (request for quotes) to a seller, the seller's response, once accepted by the bityer becomes a legally binding contact. This seller's response in known as a A Purchase Order B Sales Contract C Commercial Invoice D Pro Forma Invoice
Solution
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(266 Votes)
Lachlan
Master ยท Tutor for 5 years
Answer
The answer is **D. Pro Forma Invoice**.Here's why:* **Pro Forma Invoice:** This document acts as a preliminary bill of sale sent by the seller to the buyer before the shipment of goods. It outlines the proposed terms of the sale, including a description of the goods, quantity, price, shipping terms, and payment method. While not a legally binding contract in itself, *acceptance of a pro forma invoice by the buyer signifies their agreement to the terms and effectively turns it into a sales contract.** **Purchase Order (A):** This is a document issued by the *buyer* to the seller, indicating the types, quantities, and agreed prices for products or services they wish to purchase. It's the buyer's official offer to purchase.* **Sales Contract (B):** This is the final, legally binding agreement between the buyer and seller. It outlines all the terms and conditions of the sale. While the accepted pro forma invoice *becomes* the sales contract, it isn't the term used for the seller's initial response to the RFQ.* **Commercial Invoice (C):** This is a legal document issued by the seller to the buyer after the goods have been shipped. It serves as a record of the transaction and is used for customs clearance and payment. It comes *after* the pro forma invoice and the establishment of the sales contract.