Honouring a quote

[NJW39]

Hi, if you provide a quote and then say that you cant honour (since you would lose money) prior to the commencement of the work, can a prospective client force you to honour it (and therefore lose money)?

 

[Paul_Rosser]

Does your quote have any terms on it, such as "until a desposit is paid there is no obligation to perfom the work ?" Which may give you a get out.

I found this which may help -

"Normally a quotation is binding in law. This differs from an estimate which is just that an estimate of the cost which could increase.
When I worked in the Contracts Dept of a firm many years ago a quotation would be binding on both sides but it will depend if you signed a contract and what the wording is. "

 

[Spongebob]

Unless a contract has been made to provide goods or services you have no obligation to provide said goods or services. A quote on its own is not such a contract.

If you do go ahead and supply the goods or services however, you are bound to do so at the price quoted.

In the OP's current situation, apparantly with no contract in place, he can simply refuse to do the work at all.

 

[visagephoto]

Does your quote have any terms on it, such as "until a desposit is paid there is no obligation to perfom the work ?" Which may give you a get out."

As far as I'm aware a quote guarantees the service offered and the price on completion of the job, and only comes into effect once the work has been started. However a renewed quote could be issued before commencement as a quote isn't a contract which obligates either party to accept or proceed with the job.

Edited to add . . . What Spongebob said.

 

[Paul_Rosser]

This was answered here I think - http://www.ukbusinessforums.co.uk/forums/showthread.php?t=227785

"Yes, it's based on offer and acceptance. You have the right to withdraw that offer, but if you don't do so before they accept, then you're in contract."

 

[Michael Gerard]

In very simple terms, an offer (which includes quotations and estimate - there is no distinction between the two, only how the offer is worded), can be withdrawn at any time until it has been accepted (there are exceptions to this rule like, for example, where this is consideration to keep the offer open for a set period of time). Once the offer has been accepted (and the acceptance must be unequivocal), then a binding contract comes into place, at which point you are obliged to carry out the work / supply the goods, and failure to do so will be a fundamental breach of contract which would allow the 'innocent' party to pursue damages (ie, any increase in the price for obtaining the replacement contractor / supplier).

Therefore, providing your quotation has not been accepted, you can withdraw it.

 

[internetspaceships]

I'd suggest always putting a time limit on quotes. Or if it's stock items I say "subject to prior sale."

What did you have in place on this case?

 

[OldWelshGuy]

The other thing is not to use the word quotation, but the term 'proposal' as that is an offer for consideration, and not a quotation of work. Even if they accept the proposal it is just that, it is a proposal for discussion.

 

[Spongebob]

In very simple terms, an offer (which includes quotations and estimate - there is no distinction between the two, only how the offer is worded), can be withdrawn at any time until it has been accepted (there are exceptions to this rule like, for example, where this is consideration to keep the offer open for a set period of time). Once the offer has been accepted (and the acceptance must be unequivocal), then a binding contract comes into place, at which point you are obliged to carry out the work / supply the goods, and failure to do so will be a fundamental breach of contract which would allow the 'innocent' party to pursue damages (ie, any increase in the price for obtaining the replacement contractor / supplier).

Therefore, providing your quotation has not been accepted, you can withdraw it.

Are you sure about that, Charlie?

It's a long time since I did Business Studies, but I seem to remember that a price displayed in a shop, or a quotation given by a tradesman, is simply an 'invitation to make an offer'. A contract does not come into place until that offer by the customer is acceped by the supplier.

An invitation to make an offer can be withdrawn at any time.

 

[Michael Gerard]

Are you sure about that, Charlie?

It's a long time since I did Business Studies, but I seem to remember that a price displayed in a shop, or a quotation given by a tradesman, is simply an 'invitation to make an offer'. A contract does not come into place until that offer by the customer is acceped by the supplier.

An invitation to make an offer can be withdrawn at any time.

You are partly correct Spongebob.

An offer to treat is essentially inviting someone to make an offer. For example, a magazine in a newsagents is an invitation to treat, and an offer is only made when the would-be purchaser offers to buy the magazine, and a contract only comes into being when the newsagent accepts that offer. Same as [say] clothes displayed in a shop. It allows sellers to accept or reject offers when [say] the price is a mistake or the seller simply does not wish to sell it.

However, a price quoted and directed to a specific person or company is an offer that is capable of being accepted per se. But the offer can be withdrawn at any time before it is accepted (subject to exceptions to this general rule).

So the 'quote' given by the OP is in fact an offer (unless there is wording in the quotation, or something else that makes the quote unable to be accepted), and can be withdrawn at any time unless it has been accepted.

Further, time to accept a quotation can also elapse where a 'reasonable amount of time' has elapsed from the date that the offer was made (what is reasonable will be subject to the merits of the case). That said, I would always recommend that quotations are submitted with clear time limits for accepting the offer. Perhaps even state "Offer subject to agreeing mutually acceptable terms", which is a get-out in case a mistake has been made etc.

 

[Geoff T]

SpongeB - I make Charlie 100% on the post and response... reads like the manual!

"offer and acceptance" precedent-setting cases differ per industry, but Charlie's take on it looks spot on to me...

 

[NJW39]

thank you very much indeed to all have posted - some great replies - many thanks to all of you