What is the difference between an estimate and a quote, and is a quote binding?
In everyday use, an estimate is usually an informed guess that can change once the job is better understood, and a quote is usually a set price for stated work. The label matters less than what the paper says and whether the customer accepted it. In general contract law, an accepted offer forms a contract, so whether a quote binds depends on its terms, what both sides did and state law. This is a plain summary, not legal advice.
How the words are usually used
| Estimate | Quote | |
|---|---|---|
| What it usually means | An informed guess at the price | A set price for the work described |
| Can it change? | Often, as the job becomes clearer | Usually only if the work changes |
| When it is common | Before the full scope is known | When the work can be priced up front |
The paper matters more than the word
Neither the FTC consumer page nor the legal dictionary entry cited here defines the two words, and businesses use them loosely: some call a firm price an estimate, and some call a rough number a quote. What usually decides how a document works is what it says: the work it covers and does not cover, how long the price stands, what can change it, and whether the customer signed or said yes.
If you mean a number to be firm, say so; if it can change, say what would change it. The related answer on writing a quote that wins the job covers what to put in one, and the related answer on free estimates covers the visit.
What the FTC tells homeowners to expect in writing
The Federal Trade Commission's consumer advice on avoiding home improvement scams tells homeowners to get multiple estimates, and says a written estimate should include a description of the work, materials, completion date and the price. It tells them to ask for a written contract even if their state does not require one, with the contractor's name, address, phone number and license number, estimated start and completion dates, and any promises made in conversations about the scope of work and the cost of labor and materials.
It also tells them the contract should include a written statement of their right to cancel within three business days if they signed it at home or somewhere other than the seller's permanent place of business, and notes that some states limit how much a contractor can ask for as a down payment. This is advice to consumers about home improvement work, not a definition of either word.
When can a quote become binding?
The Legal Information Institute's Wex entry on "offer" describes general contract law: an offer stated in a way that would "lead a reasonable person to expect a binding contract" becomes a binding contract when the other side accepts it. It says the person who made the offer can typically withdraw it before acceptance unless the parties created an option contract, and that a counteroffer acts as a rejection of the first offer.
Whether a particular estimate or quote is an offer, and what happens when the job turns out different, depends on its words, what both sides did and state law; a lawyer can advise. This is a plain summary, not legal advice.
Sources
- Federal Trade Commission Consumer Advice, "How To Avoid a Home Improvement Scam" (July 2022)
- Legal Information Institute, Wex, "offer" (last reviewed August 2023)
Related answers
Lead generation and lead tracking
A lead that waits a day goes cold, and a lead with no source teaches you nothing. Ascent Vision fixes both.