In short: a quote is a binding price; an estimate is a non-binding assessment. Both give price information before the job starts, but they differ in how binding they are:
| Quote | Estimate | |
|---|---|---|
| Bindingness | binding | non-binding assessment |
| Price after acceptance | the stated price applies | can differ |
| Suited for | jobs that are easy to calculate | jobs of unclear scope |
| If costs rise | variation only for extra services | inform the customer in time |
Both describe a price given before work starts, but they differ in how binding they are:
Quote: a binding price
A quote is a firm commitment: once the customer accepts it, that price applies — deviations are only possible in narrow cases, such as extra work the customer requests afterward.
Estimate: a non-binding approximation
An estimate, by contrast, is generally non-binding — it's an informed approximation, not a price guarantee. If it turns out during the work that the actual cost will be significantly higher, the business should inform the customer before continuing.
What counts as "significantly higher"?
There's no fixed percentage that triggers this duty to inform — it depends on the specific case. In practice, it's safer to inform the customer too early rather than too late.
What does a non-binding estimate mean?
An estimate is generally non-binding. You do not guarantee the price and the customer is not obliged to place the order. The assessment must still be careful and comprehensible. A deliberately low estimate can cause trouble and, in a dispute, claims for damages.
What does a cost ceiling mean?
A cost ceiling is an agreed upper limit for the cost of a job. Work can be billed by effort up to that amount, but not beyond it unless the customer agrees beforehand. An estimate with a cost ceiling is therefore more binding than a pure estimate without being a fixed-price quote. What matters is that the limit is put in writing.
Which one fits which job?
For clearly plannable jobs — known material needs, predictable working hours — a binding quote builds trust with the customer. For jobs with unknown scope, such as repairs with an uncertain root cause, an estimate is often the more honest choice, since it openly states the uncertainty. Either way, both start from the same realistic hourly rate.
