Quotations & Estimates – Know The Difference As It Can Save You A Fortune

03 May. 2019

Written by Neil Marsh MCIPHE RP RHP EngTech

It is our experience that most people do not know the legal differences between a quote and estimate. If you are to fall victim to a scam or have had to pay unjust additional charges, the likelihood is you that the agreed work was done on an estimate…

A known practice by some contractors in the building trade is to provide estimates much lower than the competition and then charge the client with “additional charges” once the work starts (known as underbidding). Often estimates like this can end up costing the consumer more than what the competition was offering in the first place!

Not all businesses that give estimates are bad eggs, some do it simply to keep litigation to a minimum, but we say why take the risk?

Where it would not make good business sense to offer quotations without complex terms and conditions due to the unforeseeable aspects of the job, estimates are acceptable. An example of this would be estimating for foundation work on a construction project. As often it is not possible to know what is beneath the ground until you start digging,  it would be reasonable for an estimate to be issued over a quotation as how much concrete and work required can vary greatly. However, in most cases, especially in home improvement works, it should be possible for the work to be done on a quotation basis.

So what is the difference? The Citizens Advice definitions are:

1. Quotations

A quotation is a promise to do work at an agreed price. It should set out what work will be done for the agreed price. If you are given a quotation (or ‘fixed estimate’) you should not be asked to pay extra unless you asked the trader to do extra work or the trader had to do extra work in order to do a satisfactory job and they couldn’t reasonably have known that they would need to do this work when they gave the quotation.

If you accepted a quotation, you will probably have to pay what was quoted.

Please note that quotations should have terms and conditions that specify what is not covered under the agreed price.

2. Estimates

If you were given an estimate, you might think you agreed to a price beforehand, however, unlike a quotation, an estimate is not an offer to do the job for that amount but just the trader’s best guess as to how much the work will cost. This means that the trader can charge you more than the estimate. However, any extra charged must be reasonable. If you do not think the extra work charged for is reasonable, you can dispute it. You should use the estimate as a starting point for negotiation with the trader.

FORTHRIGHT strongly advises you to hire a company that gives you a full written quotation that has clear terms and conditions that define the terms of their service. You should always read the terms and conditions that make up the agreement and ensure that you understand them fully before committing to an agreement.  FORTHRIGHT issues central heating & boiler quotes in Cheltenham, Gloucester, Tewkesbury and the surrounding areas, and for other quotable work as standard, to all of their customers.