Auto default of contract on Requisition

Hi,

We are trying to understand how contracts are auto defaulted on requisition line.

Found below for how this works on PeopleBooks-

Automatic Default Rule Hierarchy-

The contract defaulting rules hierarchy determines the order of how the system selects to automatically supply a contract by default to requisitions and purchase orders. The rules enable the system to determine the single most appropriate contract. These combinations must be unique:

1.    Supplier.

2.    Current contract version.

3.    Approved contract status.

4.    Contract begin date.

      More than one contract can exist for the same supplier and item, or supplier and category, as long as the contract begin dates are different.