An ICPO (Irrevocable Corporate Purchase Order) is the buyer's formal, signed commitment to purchase a specific product, in a specific quantity, on specific terms, within a validity period. It answers a seller's Soft Corporate Offer and triggers the seller's Full Corporate Offer or draft contract. It is a corporate document on the buyer's letterhead, not a bank instrument, and it is only as good as the company that signs it.
Definition
In bulk trade of petroleum products, fertilizers, sugar, grains and metals, the ICPO is the document that moves a negotiation from "interested" to "committed". By signing it, the buyer states that it is ready, willing and able to buy the described goods and that it will not withdraw during the stated validity period. Sellers rely on it to allocate product, prepare the Full Corporate Offer and start their own compliance work.
"Irrevocable" is a commercial practice rather than a magic word. Whether the buyer can actually be held to the ICPO depends on the governing law and on what the document says. Treat it as a serious, good-faith commitment that reputable counterparties honour, not as a substitute for a signed Sales and Purchase Agreement.
What a complete ICPO contains
| Section | Content |
|---|---|
| Buyer identity | Full legal name, registration number, registered address, signatory name and title, company seal or stamp. |
| Product | Exact product and specification (for example EN590 10 ppm, urea 46% granular, ICUMSA 45), origin if required. |
| Quantity | Trial quantity and monthly quantity, contract duration (spot or 12 months, for instance), tolerance. |
| Price basis | Fixed price or formula (Platts, CBOT and so on), and the Incoterm: FOB or CIF with the port named. |
| Delivery | Loading or destination port, first delivery window, vessel or container terms. |
| Payment | Instrument the buyer will provide: DLC, SBLC, MT103 against documents, and the buyer's bank name. |
| Inspection | Named agency (for example SGS) and who pays at loading and discharge. |
| Validity | How long the ICPO stands, typically 7 to 30 days. |
| Confirmations | Statement that the buyer is not on any sanctions list, that funds are available, and that the ICPO is issued with full corporate authority. |
ICPO, LOI, RWA and POF: not the same thing
- LOI (Letter of Intent): an expression of interest. Non-binding. Used early, sometimes instead of an ICPO for a first contact.
- ICPO: a firm purchase commitment for the validity period.
- RWA (Ready, Willing and Able): a letter, sometimes from the buyer's bank, confirming capacity to perform. Often attached to the ICPO.
- POF (Proof of Funds): evidence of available funds. A bank-issued RWA or a recent bank statement, shared under confidentiality. Reputable sellers ask for it at contract stage, not before they have shown their own credentials.
Where the ICPO fits in the sequence
- Seller issues a Soft Corporate Offer (SCO).
- Buyer returns an ICPO on letterhead, usually with company registration documents and passport copy of the signatory for KYC.
- Seller issues the Full Corporate Offer (FCO) and, once accepted, the draft Sales and Purchase Agreement.
- Contract signed by both parties; bank instruments exchanged as the contract says.
- Proof of product, loading, inspection, shipment, documents, payment.
The order matters. Some sellers ask for the ICPO before the SCO; that is acceptable when the seller is a known refinery, mill or producer, less so when the "seller" is an intermediary who has shown nothing yet.
- A demand for a Bank Comfort Letter or bank-to-bank contact before the seller has provided its own company registration and a verifiable offer.
- ICPO templates that ask for the buyer's full bank account details and signatory specimen on page one.
- "Send the ICPO and the seller will release proof of product within 24 hours." Proof of product comes after contract, and it is verified through the inspection company or the terminal, not through PDFs.
- Pressure to sign within hours because "allocation is closing".
A note for buyers
An ICPO puts your company's name and signature on a commitment. Issue it only for products you have the funds and the logistics to receive, only to counterparties you have verified, and only after checking the price basis against the market. Our compliance-first approach starts with exactly that verification on both sides.
Structuring a purchase or a supply contract and want the instruments in the right order? Request a consultation or message us on WhatsApp at +1 941 202 4887.