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Estimates and Quotations

Estimates and Quotations

It is generally recognised that an estimate is a rough guess at the likely cost of a service e.g. a repair which is not binding, whereas a quotation is meant to be an agreement for a fixed price.

However, very few traders and business are aware of some of the finer details contained within the Consumer Contracts Regulations 2013 and the Consumer Rights Act 2015.

Under the 2013 Regulations traders must tell consumers, before the conclusion of a contract:

  • the total price of the goods or services including taxes
  • or where the nature of the goods or services is such that the price cannot reasonably be calculated in advance, the manner in which the price is to be calculated (which will usually involve e.g. providing details of hourly rates, estimates of time likely to be taken and the cost of any materials required)

Under the 2015 Act section 50 (1) provides  that in relation to quotations every contract to supply a service is to be treated as including as a term of the contract anything that is said or written to the consumer, by or on behalf of the trader, about the trader or the service, if either:

  • It is taken into account by the consumer when deciding to enter into the contract.
  • It is taken into account by the consumer when making any decision about the service after entering into the contract.

This can include matters such as expertise, timescales and results.

All is not lost for the trader though as the 2015 Act also provides that any information taken into account by the consumer is subject to anything that qualified it and was said or written to the consumer by the trader on the same occasion.

Furthermore, a contract term which gives the trader a unilateral right to vary the price once the contract has been concluded is likely to be unfair.

To avoid arguments therefore, it will be wise to:

  1. Provide as much information as reasonably possible about price and how it will be worked out at an early stage
  2. Make it as clear as possible whether the price being provided is a fixed quote or a rough estimate which will be revised (and the basis upon which it will be revised) when more information is available and to ensure that this is pre-contract

This blog was written by:  Michael Stewart

DISCLAIMER: Please note that this post sets out the general position under the general law. It should not be acted upon in any specific circumstances without taking specific legal advice as to those circumstances. Also, it should not be relied upon, acted upon or treated as a substitute for specific advice relevant to particular circumstances. If you do require specific advice please contact us for assistance.