Is an estimate legally binding?

[The Entrepreneurs Network]

Is an estimate a legally binding contract in the US?

[Business Attorney]

If it is really just an estimate, then it is probably not binding on either party. However, what the parties call it is only one indicator of what the parties intended. I have seen contractors' bids that were labeled "Estimate" at the top but where the text made it clear that it was a bid that was open for acceptance for a specific period of time. The title "Estimate" did not really describe what the document was.

If it's a bid, then under contract law it is generally considered an "offer." An offer can either be accepted or rejected. A counter-offer is considered a rejection of the original offer and a new offer by the person making a counter offer. In most cases, an offer can be withdrawn at any time before it is accepted. So even if it is a valid offer, the person making the offer can take it off the table. Once the offer is accepted, however, a contract is formed and neither party can unilaterally withdraw either the offer or the acceptance.

[huggytree]

all my bids are actual contracts w/ locked in prices. i have a 30 day time period at the bottom to accept the price.

if the job goes well i dont give any money back, just as if it goes poorly i cant ask for more.

i had a roofer give me $300 back once because he over estimated shingles...it was great, but i thought he was crazy to give it back since i NEVER expected it. i assume he would have charged me more if he was short shingles.

im just finishing up a 1st floor remodel on my house. the builder keeps coming up w/ extra's because of his mistakes....he's also got a pile of wood trim in my garage he's going to return for credit. since he's charging me for the materials he forgot im going to ask for a credit for the extra wood he's returning...it works both ways....(he's a friend of mine or used to be)

i think a bid, a contract and an estimate are all a little bit of a gray area...make sure you know which one your signing....your not going to court or liening your house over $150 in extra's..you just pay to get it out of your head and move on...i dont think many business owners know the difference or they change their definition in their heads to justify the extra's they want to charge.

i bid on a new house once and didnt see a drain in a basement stairwell. it wasnt in my contract.. it was a major mistake since i had to go through the footing of the house...probably a $1k mistake...because my bid gives an overall -'Plumbing for 2 1/2bath - 2 story house' i ate it. I also give details about every fixture, but because the builder assumes my bid covers all plumbing i felt i had no choice but to eat the extra costs.....many subs. would have called it an extra....i use this as a selling point of my business...'no extra's'..

[Mike in Malaga]

an estimate is an estimate
it's not worth the paper it's written on
neither side can present it in court
now a quotation
ah, that's different
that is a commitment
mike

[Spider]

an estimate is an estimate
it's not worth the paper it's written on
neither side can present it in court
now a quotation
ah, that's different
that is a commitment
mikeAs David pointed out above, Mike, it hardly matters what you call it. If the document has a way of determining the price and the wording indicates that the contractor is offering to do the work for this price, and it is accepted, the conditions for a binding contract exist -- that is to say, 1. offer; 2, acceptance; 3, mutual benefit.

"I think the work you are asking for will cost $5,000," is not an offer to do the work.

"I estimate that the work will cost $5,000 and I will do it for that price," is an offer. If accepted, a binding contract now exists.

"I estimate that you require 20 CY of concrete, and I need 25% on the cost of the concrete for labor. Allowing for concrete at $100 per CY, my quotation is $2,500. I will do the work for whatever concrete costs plus 25%" -- if accepted, this creates a contract, but not at a price of $2,500. The contract is for however much concrete is needed, at whatever cost the concrete is, plus 25%. If 22 CY of concrete are required and concrete is delivered at $110 per CY, the final bill (the contract sum) will be $3,025.

One needs to be careful exactly what is being offered and what is being accepted.

[jimcro55]

It depends what kind of estimate that you are talking about. On several different occasions, I have reached out to 5 or 6 companies looking for estimates, then when I get the best price, I use that company to buy the product or service. If an estimate was legally binding, then it is basically not an estimate, but instead should be called a fixed price. Quotations are different and thats when things can get tricky!

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