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Insight · Commercial

Quote or estimate,
and which one binds you.

One is an offer that becomes a fixed price the moment it is accepted. The other is an informed guess. Almost nobody says which they are sending, and the word at the top of the page is not what decides it.

Published ·5 min read·Written by Unibuild

A quotation is a firm offer of a fixed price for a defined scope, and once the customer accepts it, that price is the contract price. An estimate is a considered opinion of likely cost, and it does not fix the price. The word at the top of the document is not what decides which one you sent: the substance of what it says is.

The difference, properly stated

A quotation is an offer in the contractual sense. It sets out a price for identified work, and it is capable of being accepted. When the customer accepts it, a contract comes into existence at that price, and you are bound to do the work for it even if it turns out to cost you more. That is the whole point of quoting: the customer is buying certainty, and the risk of getting the price wrong transfers to you.

An estimate is not an offer of a fixed price. It is a statement of what the work is likely to cost, given what is known at the time. It informs a decision. It does not create a fixed obligation to perform at that figure, because a figure was never firmly promised.

Both are perfectly legitimate. They allocate risk differently, and choosing between them should be a commercial decision about how much you know, rather than a habit.

The heading on the page does not decide it

Here is the part most writing on this subject leaves out, and it is the part that matters when there is an argument.

Whether a document is a binding offer is determined by what it actually says and what a reasonable person receiving it would understand, not by the word printed at the top. A document titled Estimate that names a single firm figure for a clearly defined scope, with no qualification anywhere, can operate as an offer and bind you at that price. A document titled Quotation that is hedged throughout, subject to survey, subject to opening up, and priced against provisional quantities, may not fix anything much.

So a firm that types Estimate at the top and then behaves as though that word alone protects it has protected nothing. If you intend a figure to be provisional, the document has to say so, and say why, and say what would change it.

The label is not the protection. The wording is the protection, and most disputes about this turn on a document that never made its own status clear.

How much more than an estimate can you charge

The question everybody actually arrives with. There is no fixed percentage in law, and the widely repeated figure of ten or fifteen per cent is a convention rather than a rule.

What governs it is what was agreed and what was reasonable. If you gave an estimate and the eventual cost is higher, you are generally entitled to a reasonable sum for the work actually done, provided the increase is genuinely attributable to matters that were not, and could not reasonably have been, known when you estimated. What you cannot do is treat an estimate as a way of quoting low to win the job and then charging what you always expected.

Three things make an increase defensible, and their absence makes it very hard to defend:

  • The estimate said it was an estimate, and explained what could move the figure.
  • You told the customer as soon as you knew, in writing, before doing the extra work rather than after. This is the single most important one. A cost increase raised at the point of discovery is a conversation; the same increase raised on the final invoice is a dispute.
  • The cause is identifiable. Unforeseen ground conditions, something found on opening up, a change the customer asked for. Not simply that it took longer than you thought.

Where the customer is a consumer rather than a business, additional statutory protections apply to them, and the practical bar for justifying an increase is higher. Where both parties are businesses, the contract terms carry more of the weight.

What to put on the document

Whichever you are sending, four things stop nearly every argument in this area.

  1. Say which it is, in a sentence, not just in the title. "This is a fixed price quotation for the scope set out below" or "This is an estimate based on the information available; the final cost will depend on the matters listed."
  2. Define the scope precisely, including what is excluded. Most price disputes are scope disputes wearing a different coat.
  3. Put a validity period on it. Prices move. A quotation with no expiry is an offer that stays open, and on materials in a rising market that is a real exposure. This links directly to the payment timetable only once the job is running, but it starts here.
  4. State what causes a variation and how it will be valued. Provisional sums, rates for additional work, and the requirement that changes are instructed in writing.
Where this touches the platform

Unibuild prices work and produces the document, and the useful part is what happens afterwards rather than at the moment of sending. Where a project was quoted through the platform, the works schedule draws on the priced sections of that quotation with their tendered values, so the figure a job is measured and applied against has a documented origin rather than being reconstructed from a spreadsheet somebody has since edited. That is what makes a later argument about scope short: the priced scope, the instruction and the valuation sit on the same record. Deciding whether to send a quotation or an estimate is a commercial judgment the platform does not make for you.

Advanced Estimating Rate valuations Documents and certificates Applications for payment

Where to start, on Monday

Open the last document you sent a customer and read it as though you were the customer's solicitor. Does it say which it is. Does it define what is excluded. Does it expire. Does it say what happens if something changes.

If any of those is missing, fix the template rather than that one document. It is twenty minutes of work that removes an entire category of argument from every job you price from now on.

This is general contract law rather than a construction statute, and a live dispute about a specific document is worth twenty minutes of a solicitor's time. Everything above is the shape of the position, not advice on yours.

Asked most often

The follow-up questions.

Both words, and the rest of the vocabulary, are defined in the construction glossary.

What is the difference between a quote and an estimate?+
A quotation is a firm offer of a fixed price for a defined scope; once the customer accepts it, that price becomes the contract price and the risk of having priced it wrong is yours. An estimate is a considered opinion of likely cost that informs a decision without fixing the price. Both are legitimate, and they allocate risk differently.
Is an estimate legally binding in the UK?+
Not as a fixed price, provided the document genuinely operates as an estimate. But the heading is not what decides it: whether a communication is an offer capable of acceptance turns on its substance and how a reasonable recipient would read it. A document titled "estimate" that states one firm figure for a clearly defined scope with no qualification can bind you at that figure.
How much more than an estimate can a builder charge?+
There is no fixed percentage in law; the commonly quoted ten or fifteen per cent is convention rather than rule. What governs it is what was agreed and what is reasonable. An increase is defensible where the document said it was an estimate and what could move it, the customer was told in writing as soon as the increase was known and before the work was done, and the cause is identifiable rather than simply taking longer than expected.
Can I withdraw a quotation after sending it?+
Generally yes, at any time before it is accepted, provided the withdrawal reaches the customer before their acceptance. Once accepted, a contract exists at that price. This is why a validity period matters: a quotation with no stated expiry is an offer that remains open, which on materials in a rising market is a live exposure.
Should I send a quote or an estimate?+
It depends on how much you know. Quote where the scope is fully defined and you can see everything you are pricing, because the customer is buying certainty and will usually pay for it. Estimate where genuine unknowns exist, such as work behind a wall or ground conditions, and say plainly in the document what those unknowns are and how they will be valued if they materialise.
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