When hiring someone for a specific task or to supply a product, consumers are typically provided with either an estimate or a quotation incorporating the expected costs. While the terms ‘estimate’ and ‘quotation’ are often used interchangeably, they carry different meanings and implications, especially in relation to consumer rights and contractual agreements. Understanding the distinction between the two is essential for consumers to make informed purchasing decisions and to prevent misunderstandings or conflicts down the line.
Estimates generally provide an approximate calculation of the cost involved to supply a product or service. In other words, an estimate does not provide an exact figure but gives an idea of the potential expense. These are often used for services where the exact price cannot be accurately determined upfront, as various factors may influence the final cost, such as unforeseen complications or changes in the scope of work.
For example, if a consumer requests an estimate to paint a house, the painter may calculate the cost based on the size of the rooms or the house and the amount of paint to be used. However, if unexpected issues arise, such as extensive wall damage, the final cost may exceed the initial estimate.
Because of this uncertainty, an estimate is best sought during the early stages of decision-making when consumers are still shopping around and exploring different options.
It is important that there is a clear agreement with the trader that any significant price increase will require the consumer’s approval
Furthermore, to avoid misunderstanding or unpleasant surprises, if a consumer chooses to proceed with the purchase of a service based on an estimate, it is important that there is a clear agreement with the trader that any significant price increase will require the consumer’s approval. This arrangement should be documented clearly on the estimate to prevent disputes.
A quotation, on the other hand, is a formal offer to provide a product or service at a fixed price. Unlike estimates, quotations are detailed and specific, outlining exactly what is included in the price. For instance, a quote for installing a new air conditioning system would include a breakdown of the costs for the unit itself, labour, and any additional services like duct work or electrical adjustments.
As costs may change over time, some quotes may need to be confirmed by not later than a particular date to remain valid. Once consumers confirm a quote, the trader is legally obliged to deliver the goods or services at the specified price. Consumers can only be required to pay more than the confirmed quote if they have agreed to additional work or if the quote allows for a variation in price and the consumer agreed to it.
Consumers have the responsibility to honour their commitment once they confirm a quotation and cannot simply change their mind. If they do so, they could be subject to financial penalties or cancellation fees.
Consumers should be aware that some businesses charge a fee for providing quotations. While this is not illegal, it is wise to verify this with the trader beforehand. Traders are also responsible for informing consumers about any such fees before providing the service.
Before accepting a quote, consumers are encouraged to shop around and obtain quotations from various providers. When comparing quotes, it is important to consider not just the price but also the quality of materials to be used and, where applicable, the timeline for completing the job.
The reputation of the trader is another key factor. Researching reviews and feedback from consumers who had previously engaged a specific company or trader for a job, and being assured of the quality of the service provided, can undoubtedly help consumers make a well-informed choice.
To protect both the consumer and the trader, it is advisable to get quotes in writing. This ensures there is no disagreement about the agreed price. A written quote should include: the contact details of the trader or company; a detailed description of the job or product being provided; the expected date of delivery or service completion, if applicable; and the final agreed price, inclusive of taxes and any other applicable charges.
If consumers find that the billed price differs from the quoted price, they have the right to insist on paying the agreed amount. In case of a dispute, they can seek assistance from the MCCAA’s Office for Consumer Affairs.
Understanding the difference between estimates and quotations can help consumers navigate the costs of services and products more effectively. While estimates give an approximate cost, quotations provide security on an agreed fixed price. Knowing when to use each enables consumers to make informed purchase decisions and safeguard their rights.
Odette Vella is director, Information and Research Directorate, MCCAA.