Is an invoice legally binding?

On its own, an invoice is not a legally binding agreement. However, a legally binding agreement related to the invoice can occur when the essential elements of a contract are met. To form a binding contract, there must be an offer from a seller that is accepted by a buyer based on an exchange of value (sometimes called consideration) and a mutual intention to form an agreement. If any of these components are missing, then no legally binding contract has been formed.

Note, also, that a seller and buyer can create an oral contract where they verbally agree to complete an exchange of goods or services. In such instances, invoices are sometimes sent to request payment on the oral contract already formed between the parties. Although an oral contract is legally binding, it is difficult to prove the existence of one should a party—usually the buyer—dispute it.

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