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Pro forma invoice. What are the legal implications of this form? If an error in one of the line items was made, can it be corrected or are you locked into what is entered on the Pro forma invoice? Case in point. A contractor requested such document in order to make a down payment for goods and services ordered. The freight dollars were not listed but referenced in to be billed at the time the items were shipped. However, the estimated freight amount was incorrectly labled "delivery and installation" and that particular line item was left off completely. Are we locked into this error or can it be corrected at the time an invoice is prepared?

Submitted: 538 days and 8 hours ago.
Category: Business Law
Value: $40
Status: AWAITING CUSTOMER ACTION
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Everett, Washington

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Accepted Answer

Hello XXXXXXXX,

 

In trade transactions, a pro forma invoice is a document that states a commitment from the seller to sell goods to the buyer at specified prices and terms. It is used to declare the value of the trade. It is not a true invoice, because it is not used to record account receivable for the seller and accounts payable for the buyer.

Sales quotes are prepared in the form of a pro forma invoice which is different from a commercial invoice. It is used to create a sale and is sent in advance of the commercial invoice. The content of a pro forma invoice is almost identical to a commercial invoice and is usually considered a binding agreement although the price might change in advance of the final sale.

 

Unfortunately you might be locked into that error unless you can show that this was a clear error and does not normally occur in this deal or transaction. Of course if the contract agrees that it was an error then you will not be locked in and can change it. However if they relied on the error then you are locked in.

 

Please let me know if you have any other questions, or require clarification of this matter. Otherwise please hit "ACCEPT", so I may receive credit for my response. Thank you

 

 

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Expert: Business Law Expert
Pos. Feedback: 100.0 %
Accepts: 44
Answered: 8/20/2008

Attorney

5 years experience in Corporate and Business Entities

538 days and 7 hours ago.

Reply

Since the factory freight is stated to be billed later when the shipment takes place, and whart was the estimated factory freight was mistakenly labled "delivery and installation" then it seems like we could correct this error by charging the difference with the factory freight or is this not legal?

Posted by Business Law Expert 538 days and 7 hours ago.

Answer

Yes, from what you have just said, I would say you would be able to correct that error by charging the difference with the factory freight.

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