A delivery notice is a formal notification from one party to another that products that are slated for delivery will in fact be delivered on a specific date. The term is often used in business settings to notify buyers that products that have been ordered are in transit and can be expected to arrive on or by a given date. In situations involving investments, a delivery notice is often common with futures contracts, where the holder of the contract notifies the clearing house of the intent to settle the contract and deliver the goods on a specified date.
In all its incarnations, a delivery notice makes it possible to document the specific intent regarding the delivery of a holding or product. There is no one right way to structure this type of notice, although the document will always provide the specified date that the delivery will take place. Depending on the nature of the products involved, the document may be very brief and to the point. In situations where specific instructions regarding the delivery are required, the text of the document may be quite detailed. In some nations, there are regulations that govern at least a portion of the verbiage that is included in a standard delivery notice, although the format is more often governed on accepted practices that prevail in the culture where the transaction is taking place.
With an investment situation such as a futures contract, the delivery notice serves the purpose of allowing the investor to know when the commodity purchased via the contract will be delivered to the clearing house. This makes it possible for the investor to begin making plans to warehouse the commodity or possibly sell it at a profit. The notice also serves the purpose of reminding the investor of any remaining obligations he or she may have to the seller, making it possible to settle those obligations in a timely manner and allow the contract to be fully completed.
Those who prepare and send out a delivery notice also benefit from the use of this type of document. By specifying a delivery date, the seller commits to completing the transaction by that date. This in turn triggers the internal processes necessary to comply with the covenant made in the text of the document. For example, a supplier who promises delivery of goods to a client by a specific date will use that commitment to arrange production operations so the goods are available, and then arrange shipment of those goods so they arrive no later than the date named in the delivery notice.
