Buying a service: estimates vs quotations
Estimates are an approximate calculation of the cost of a service, not an exact price. A quote is a fixed price that, once both parties agree to, becomes final.
When hiring a company or an individual to provide a service, consumers are usually given either an estimate or a quotation outlining the expected costs. These two terminologies are sometimes used interchangeably, but in truth, they have different meanings and implications, particularly in relation to consumer protection.
Estimates are an approximate calculation of the cost of a service, not an exact price. On the other hand, a quotation is a fixed price that, once both parties agree to, becomes final. Understanding this distinction helps consumers make informed decisions and avoid potential disputes.
Estimates are commonly used for services where the final cost cannot be determined in advance, as unforeseen factors may change the original estimated cost. For example, a mechanic may give an estimate for repairing a car, but if additional faults are identified during the work, the overall cost could increase.
Similarly, a caterer might estimate the cost of providing food for an event based on the number of guests and food items, but the final amount may change if the number of guests increases or decreases, or if items on the menu change.
To prevent misunderstandings or unexpected costs, when a consumer decides to proceed to order a service based on an estimate, it is essential to have a clear agreement with the trader that any significant price increase will require the consumer’s prior approval.
Estimates and quotes should always be provided in writing
For example, if a consumer hires a mechanic to fix a car based on an estimate, any substantial additional costs – such as replacing parts to fix additional faults discovered during the repair – may only be applied if the consumer has expressly approved them. This arrangement should be clearly documented on the estimate in order to prevent disputes.
Unlike an estimate, a quotation provides an exact price and is legally binding once accepted by the consumer. This means that the trader is obliged to provide the service at the quoted price, even if the work required more time than expected. For instance, if a transport company issues a quotation for moving household items, the cost should remain fixed even if the move takes longer than expected.
Since costs can change over time, some quotations may need to be confirmed by a specific date in order to remain valid. For example, if a consumer confirms a catering company’s quotation to provide services for a birthday party, the company must honour the price. Consumers are only required to pay more than the confirmed quote if they request additional services, such as more food items.
Consumers also have their responsibilities and must honour any commitments they make; therefore, cancelling a confirmed quotation could result in financial penalties or cancellation fees.
Consumers are advised to seek quotations from several traders before confirming a quote by placing an order. But keep in mind that some companies may charge for providing a quote. So it is advisable to ask in advance whether a fee applies and, if so, how much it will be.
When comparing quotes, it is important to consider not only the price but also the quality of the service and the trader’s reputation. Feedback from people who have previously used the service, whether they were satisfied or whether they experienced any issues, can provide valuable insight and help consumers make well-informed decisions.
Both estimates and quotes should always be provided in writing to ensure clarity and prevent misunderstandings. Besides specifying the price, the estimate or quote should include the trader’s or company’s contact details, a clear and detailed description of what is included in the price, and the expected delivery or completion date. Providing this information in writing helps consumers make informed decisions, compare offers accurately, and serves as a reference in case any disputes arise regarding the agreed terms.
In situations where the final bill is higher than the quoted price, consumers have the right to pay only the amount originally agreed upon. For instance, if a consumer receives a quote for €500 but the final bill comes to €650 without prior agreement for the additional €150, the consumer can insist on paying the originally agreed amount of €500.
For any issues related to consumer rights and responsibilities regarding estimates and quotations, consumers may contact the Office for Consumer Affairs at the MCCAA using the ‘Contact Us’ form on the MCCAA website below. The MCCAA can also be contacted by phone at 8007 4400 or via private message on the MCCAA Facebook page.
Odette Vella is director, Information and Research Directorate, MCCAA.