While the words “quote”, “estimate”, “bid” and “tender” may be used interchangeably by some, there are distinct legal definitions for each word that can have a direct impact on a dispute between a contractor and client.

Using the wrong phrase in a contract or negotiations can result in a price no longer being considered fixed or a legally binding offer.

An “estimate” is simply a guess as to what the project will cost. The end price could be less or, likely, more.

A “quotation” or quote, on the other hand, is a legally binding fixed price for a fixed amount of work. The two phrases should not be used loosely.

A “tender” is a formal legal document prepared by a client setting out the specifics of a potential project and requesting “bids” or proposals from one or more contractors

								
You now have 3 options:
								

									
More answers about Construction Law
									
Master List: 2,500 Legal Answers
																													
																		
Government Links