Legal Difference between a quotation and an estimate
- Thread starter KidsBeeHappy
- Start date
J
jim_price
I would have thought it would depend entirely on the individual quotation and the estimate concerned, but in general terms a quotation would commit you to a fixed price for stated goods/services, whilst an estimate would do something similar but contain a disclaimer enabling the estimator to change the specified price.
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- Original Poster
- #12
Nope. I just want to know what the legal difference is between a quotation and an estimate. (The difference in what constitutes it, not as in the enforcement, or implications of it).
Seeing as you can be held legally to one but not the other, it makes sense that there should be proper legal definition of what the difference is.
Seeing as you can be held legally to one but not the other, it makes sense that there should be proper legal definition of what the difference is.
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A document with a price should be accomplanied with some terms and conditions and these should cover things like its validity period, what basis additional work would be priced on etc etc.
A quote if a fixed price and should be considered binding subject to the T&Cs and an estimate is a ball park figure and not binding. That said you can word T&Cs in such a way to make the quote more like an esimate, ie the quote is conditional on a final business requirement list being received and it being inline with the discussed scope.
http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1073792180&type=RESOURCES
A quote if a fixed price and should be considered binding subject to the T&Cs and an estimate is a ball park figure and not binding. That said you can word T&Cs in such a way to make the quote more like an esimate, ie the quote is conditional on a final business requirement list being received and it being inline with the discussed scope.
http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1073792180&type=RESOURCES
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B
Billmccallum
Quotation
a. the statement of the current or market price of a commodity or security.
b. the price so stated.
Estimate
to form an approximate judgment or opinion regarding the worth, amount, size, weight, etc., of; calculate approximately:
In the example of a plumber fitting a bathroom suite, if there are added works then they would expect to bill these separately, but leaving enough scope to add additional works is not uncommon.
a. the statement of the current or market price of a commodity or security.
b. the price so stated.
Estimate
to form an approximate judgment or opinion regarding the worth, amount, size, weight, etc., of; calculate approximately:
In the example of a plumber fitting a bathroom suite, if there are added works then they would expect to bill these separately, but leaving enough scope to add additional works is not uncommon.
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The law does not differentiate between an estimate or quotation, as it is the wording that dictates the terms.
For example: "Price to remove bath, plumbing work, and replace with new bath (supplied by customer) £180+vat" will be construed as an offer irrespective of whether it was titled as an estimate or quotation, and if accepted by the customer, a binding contract is entered into and the general rule is that providing the bath is fitted to a reasonable standard, then the offeror is entitled to the agreed price; no more and no less.
But, consider this: "Price to remove bath, plumbing work, and replace with new bath (supplied by customer) £180+vat, subject to full survey of premises and type of bath supplied by customer". Although this offer is still capable of being accepted, there is a chance that the price can fluctuate at the point of billing for the completed work if (lets say), the bath was larger than anticipated.
Therefore, a builder cannot state "Estimate to build the house as per plans and specification £200,000", then come along and charge £300,000 (notwithstanding variations).
For example: "Price to remove bath, plumbing work, and replace with new bath (supplied by customer) £180+vat" will be construed as an offer irrespective of whether it was titled as an estimate or quotation, and if accepted by the customer, a binding contract is entered into and the general rule is that providing the bath is fitted to a reasonable standard, then the offeror is entitled to the agreed price; no more and no less.
But, consider this: "Price to remove bath, plumbing work, and replace with new bath (supplied by customer) £180+vat, subject to full survey of premises and type of bath supplied by customer". Although this offer is still capable of being accepted, there is a chance that the price can fluctuate at the point of billing for the completed work if (lets say), the bath was larger than anticipated.
Therefore, a builder cannot state "Estimate to build the house as per plans and specification £200,000", then come along and charge £300,000 (notwithstanding variations).
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In the example used, the word "will" is definitive.
ABC Ltd will deliver box A from London to Manchester for £50 on Tuesday 25th April with delivery before 9am
That's it - £50 and it will be there before 9am.
ABC Ltd will deliver box A from London to Manchester for £50 on Tuesday 25th April and endeavor to deliver before 9am
It's still £50 and you'll do your best to deliver before 9am
ABC Ltd will deliver box A from London to Manchester on Tuesday 25th April with delivery before 9am. The cost for this service is estimated to be in the region of £50
It will be there before 9, and might be, due to circumstances at the time, a little cheaper or more expensive. It would seem reasonable to conclude that sending an invoice for £100 is NOT in the region of £50, but £60 probably is, and maybe even £70.
The reality of all of these statements is that they are too simple and don't set specifics.
The price is estimated to be £X but this in practical terms could be wrong if, let's say, the package is too large for the couriers bike, and has to go via a different service, or you have to hire in a van as your's fails.
Estimate is a handy word, and the definition implies it's not accurate. A quote is rarely simple, and normally specifies absolutes and the parameters of the transactions.
ABC Ltd will deliver box A from London to Manchester for £50 on Tuesday 25th April with delivery before 9am
That's it - £50 and it will be there before 9am.
ABC Ltd will deliver box A from London to Manchester for £50 on Tuesday 25th April and endeavor to deliver before 9am
It's still £50 and you'll do your best to deliver before 9am
ABC Ltd will deliver box A from London to Manchester on Tuesday 25th April with delivery before 9am. The cost for this service is estimated to be in the region of £50
It will be there before 9, and might be, due to circumstances at the time, a little cheaper or more expensive. It would seem reasonable to conclude that sending an invoice for £100 is NOT in the region of £50, but £60 probably is, and maybe even £70.
The reality of all of these statements is that they are too simple and don't set specifics.
The price is estimated to be £X but this in practical terms could be wrong if, let's say, the package is too large for the couriers bike, and has to go via a different service, or you have to hire in a van as your's fails.
Estimate is a handy word, and the definition implies it's not accurate. A quote is rarely simple, and normally specifies absolutes and the parameters of the transactions.
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Oh yes it can!
Wording in T&C's along the lines of: "This quote is prepared on the basis of information available at date. The company reserves the right to vary the price if a material change ..."
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