A quote is an offer for a service or an item with specified conditions. The quote often includes the product description, price, payment terms and delivery terms. The term tender or bid is sometimes used instead of quote.
It is common for there to be a document setting out the terms and conditions of the potential deal (the purchase agreement). Terms and conditions that are not included in the quote usually cannot be enforced later. Prepared price lists are also quotes. The quote should be sufficiently detailed to allow the customer to compare different quotes easily.
A quote should contain:
- Specification of the good(s) or service(s).
- Price per unit and total price.
- Delivery time.
- Delivery and payment terms.
The quote is binding on the seller for a reasonable period of consideration by the buyer, unless otherwise stated in the quote. It is therefore a good rules to clearly state the period for which the quote is valid.
In some business transactions, an order acknowledgement/order confirmation is used. This is confirmation of what the buyer has accepted. The document should contain all the terms and conditions agreed between the parties.
A contract is concluded
The main principle, as mentioned earlier, is that contracts are valid whatever their form. They can therefore be concluded orally and/or in writing.
When concluding a contract, the parties often follow a specific sequence. The seller of the good or service makes an offer to the buyer with precise terms and conditions. The buyer can choose between
- accepting the offer in its entirety (unconditional acceptance)
- accepting the offer with certain modifications (conditional acceptance)
- not accepting the offer.
If the offer is accepted, it means that the parties have concluded a contract. If the offer is accepted with certain modifications, it means that it is now the buyer who makes an offer to the seller, which they can accept or modify. If the offer is not accepted at all, no contract has been concluded. In the case of real estate or other real property, only written contracts are enforceable.