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An invoice is not a legal document on its own. While invoicing is an important accounting practice for businesses, invoices do not serve as a legally binding agreement between the business and its client.
A purchase order is usually sent at the beginning of the transaction to form a contract between parties. Invoices, on the other hand, are sent at the end of the transaction using the information from the purchase order to request payment.
Generally, to be legally valid, most contracts must contain two elements: All parties must agree about an offer made by one party and accepted by the other. Something of value must be exchanged for something else of value. This can include goods, cash, services, or a pledge to exchange these items.
Invoices and contracts are integral elements of any business so its essential to understand the difference between the two. An invoice doesnt qualify as a contract, nor does a contract serve as an invoice.
Invoices outline the details of what someone owes you, usually goods and services. However, an invoice is generally considered a one-sided agreement until the client has signed it. Once youve collected a legally-binding signature, your invoice can technically be considered a contract.
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People also ask

An invoice on its own is not a contract in a legal sense, because it does not prove an agreement between two parties. Instead, an invoice is created by a business and sent to a client to request payment for its services and is therefore a one-sided document.
One of the most common legal information on an invoice is the payment deadline. However, for this to be legally binding you need to have proof that your customer has accepted the payment date. If the customer does not pay on time you will charge them interest.
The three most common contract types include: Fixed-price contracts. Cost-plus contracts. Time and materials contracts.
Types of Contracts On The Basis Of Validity Valid Contracts. The Valid Contract as discussed in the topic on Essentials of a Contract is an agreement that is legally binding and enforceable. Void Contract Or Agreement. Voidable Contract. Illegal Contract. Unenforceable Contracts.
A signed invoice not only makes it the customers legal obligation to pay once the transaction is complete, but it also reduces the risk of non-payment overall.

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