Quotes and estimates
Getting quotes and estimates for work or repairs around the home, or to electrical appliances, cars and motorcycles, can be very confusing.
It is important to understand the difference between a quote and an estimate.
There are some common traps you can fall into.
You might think you have a fixed cost, but when the account arrives it is far more than you expected.
Quotes are used to fix prices for services, including parts and labour.
It is quite legitimate for a fee to be charged for a quote as preparing it can involve an item being pulled apart and tested.
The quote fee is usually taken off the amount if you decide to go ahead with repairs.
Most tradespeople will give you a quote unless they are unsure about the work or parts that are needed.
A quote is legally binding if it forms part of a contract.
A quote becomes a contract when the trader offers work for a fixed price and the consumer accepts the offer including the conditions of the quote.
Neither party can withdraw from or change the contract without the other’s consent.
Professionals like lawyers are sometimes unable to give a quote because the time or work needed is unclear.
Getting a quote
It is a good idea to shop around and get several written quotes for the work or services you need. Ask for recommendations from friends and family if they have had similar work done.
A quote should always be in writing and should include:
- exact details of the work or service to be done
- cost of labour
- parts and materials to be used
- how long the quote is valid for.
If you decide to go ahead with a quote after it has expired, check to see if it needs to be amended due to inflation or increases in the price of materials.
Remember a quote becomes a legally binding contract when you accept the offer made by the service provider.
An estimate is often just an educated guess of the cost of work or repairs.
For example, if you need repairs to your car it can be difficult for a mechanic to know exactly what is wrong until the car is pulled apart.
However, they may give you a rough estimate based on what is most likely to be wrong.
An estimate is usually verbal but can also be in writing. They are given without knowing the exact extent of the work or the cost of materials.
Getting an estimate
Make sure you understand if the price is a quote or an estimate. Sometimes estimates can look like detailed quotes.
Check the document carefully and ask the trader if you are unsure.
If you go ahead with the work on the basis of the estimate you should:
- get the trader to contact you when they know what the full extent of the work is and how much it is going to cost
- give them a limit on what you are prepared to pay based on their estimation.
This gives you an option to agree a fixed price once the full extent is known, or stop the work from being done.
You should ask for a written quote once all the facts are known.
If you go ahead with work based on an estimate, you will have to pay the final amount even if it is more than the estimate.
There is no fixed-price agreement on an estimate as there is on a quote.
However, the final amount should not exceed the estimate by a huge amount. If it does, question it immediately.
You can't be charged for extra work not included in the quote unless you have approved it.
If you are charged more than the quoted amount, you should discuss it with the trader.
You can refuse to pay the amount in excess of the quote. The trader can then lodge a small claim to get you to pay the difference.
If the trader has your goods, they can refuse to give them to you. You can pay the account in full to get your goods back, and then try to recover the excess money through a small claims court.
Find out more about what to do if you have a dispute with a business.
For more advice, contact NT Consumer Affairs.
Last updated: 11 June 2015
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