An Irrevocable Corporate Purchase Order (ICPO) is a formal, binding commitment from a buyer to purchase a specified commodity under agreed terms. It represents a stronger commitment than an LOI and is typically issued after preliminary terms are accepted.
What Is an ICPO?
An ICPO is a corporate purchase order that cannot be revoked once accepted by the seller. It commits the buyer to proceed with the transaction under the stated terms, including product, quantity, price, delivery, and payment conditions.
When Is an ICPO Issued?
An ICPO is typically issued after the buyer has reviewed the seller’s Soft Corporate Offer (SCO) or Full Corporate Offer (FCO) and agreed to the core commercial terms. It serves as the basis for drafting the Sales and Purchase Agreement (SPA).
Essential Contents
An ICPO must include: product name and specification, quantity, pricing basis, Incoterms, delivery schedule, destination port, payment instrument (e.g., DLC, SBLC), inspection requirements, and validity period. It should be on company letterhead with authorized signatures and a corporate seal.
Legal Implications
Because an ICPO is irrevocable, buyers should exercise due diligence before issuing one. It is advisable to confirm the seller’s capacity, product availability, and pricing before committing. A signed NCNDA/IMFPA is often exchanged alongside the ICPO to protect intermediaries.