DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name : A. Kondaiah Swamy

Designation : Lecturer
Branch : Commercial and Computer Practice
Year/Semester : IV semester
Subject : Business Correspondence
Subject Code : CCP-404(5/8)
Topic : Confirmation, Execution &
Cancellation of order.
Duration : 50 Mts
Sub Topic
: Name the situations when orders
are cancelled.
Teaching Aids : PPT, ANIMATIONS
CCP404.17 1
Objectives

On completion of this period, you

would able to
 Know cases when Orders are cancelled.

CCP404.17 2
 RECAP
 After placing an order, the buyer may cancel the
Order due to various reasons.

 The letter is written cancelling the Order is called

a letter of cancellation of Order.

 This letter must mention the reasons for the

cancellation.

CCP404.17 3
 Contd..
 This letter must reach the seller before
execution of Order.

 This letter is sent after the execution of Order,

the buyer must accept the goods.

 So, the buyer must hurry up and take

immediate action so that the letter may reach
the seller before execution of order.

CCP404.17 4
Cancellation of Orders -
Circumstances:
1. Non-arrival of goods by date of delivery:

 Buyer may cancel the order if goods are not

received on scheduled date.

 Intimation to be sent to seller giving reason for

cancelling order.

CCP404.17 5
2. Change in prices:

 The price quoted in bill may change from price

quoted in price list/ quotation
 Due to variation in price, buyer may cancel order

CCP404.17 6
3. Goods despatched are different
from goods ordered:

 If buyer received the goods other than the ordered

goods, then buyer may cancel order stating reason.

CCP404.17 7
4. Unforeseen Incident:

 If the owner or partner expired after placing an

order, then Order may be cancelled stating the
same reason.

 If any cyclone or earthquake occurred after placing

an order, the buyer may cancel the order.

CCP404.17 8
5. If customer becomes bankrupt:

 If the owner or partner of the firm becomes bankrupt,

he/she may cancel the order

CCP404.17 9
6. Change in terms and conditions:

 If seller changes any terms and conditions after

placing an order.

 Ex: Seller offered 25% discount on cash sales in the

quotation, where as he allowed only 20% in the
invoice, then seller may cancel the order.

CCP404.17 10
7. If damaged/inferior quality goods
received:

 If the ordered goods are received in a damaged or

inferior condition, the buyer may cancel the order or
request for replacement.

CCP404.17 11
8. If seller asks extension of time for
execution of order:

 If the seller asks for extension of time for execution

of the order, the buyer may cancel the order
 It may be due to the following reasons
i. His customer’s work may come to a halt
ii. Customer no longer need goods at extended
time

CCP404.17 12
SUMMARY
 After placing an order, the buyer may cancel the order
due to various reasons
 But, cancellation of order should be made before
execution of order.
 The buyer must mention the genuine reason for the
cancellation of order.

CCP404.17 13
SUMMARY
CANCELLATION OF ORDERS – CIRCUMSTANCES:

3. Non-arrival of the goods by the date of delivery.

4. Variation in the prices
5. When the goods are despatched other than the
ordered goods.
6. Occurrence of a natural calamity

CCP404.17 14
 Contd..

5. Bankruptcy of customer.
6. When the goods are received in a damaged/inferior
condition.
7. When the terms and conditions are changed.
8. If the seller asks extension of time for execution of
order.

CCP404.17 15
 QUIZ
1. Cancellation of Order is made by
• Buyer
• Seller
• Creditor
• None

Ans: 1 - A

CCP404.17 16
 Contd..
QUIZ
2. Order may be cancelled due to
• Non-arrival of goods
• occurrence of a natural calamity
• bankruptcy of customer
• All

Ans: 2 - D

CCP404.17 17
Frequently Asked Questions

1. Name the situations when the orders are

cancelled?
OR
State any four reasons for cancelling the
Orders?

CCP404.17 18