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Quotes and estimates

Overview

What is a quote?

A quote is an offer to provide a service at a fixed price – for example, when a plumber tells you it will cost $950 to install a new water heater.

A quote can be spoken or written. Ideally it should be a clear, written statement of exactly what is to be done, what it will cost and how long it will take.

If you accept the quote, you have made a contract and the service provider must do the work for that price. You can only be required to pay more than the quote if you have agreed to additional work after the quote was provided, or if the quote allows for a variation by a specified percentage.

A service provider can charge a fee for preparing a quote, as long as they tell you first.

Note: If the quote does not mention GST, you are entitled to assume the quote includes GST. The service provider cannot later add GST to the quote.

What is an estimate?

An estimate is a calculation of what the service provider thinks the work is likely to cost. It indicates the nearest price, or a range of prices expected, based on past experience. It is not a firm offer to do work for the stated price, but it should provide you with a reasonable idea of what the work will cost. If you want a definite price, you should follow up by getting a quote.

Again, a service provider can charge a fee for preparing an estimate, as long as they tell you first.

Misleading quotes and estimates

An estimate or quote might give rise to a claim under the Fair Trading Act if it is false or misleading (see “Protections against misleading or unfair trading” in this chapter).

The Ministry of Business, Innovation, and Employment (MBIE) provides good information on quotes and estimates (see “Other resources” at the end of this chapter).

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