Difference between Quotation and Contract

When it comes to legal documents, two terms that are often used interchangeably are “quotation” and “contract”. However, they have distinct differences and it`s important for both clients and businesses to understand them.

A quotation is a document that outlines the cost of products or services. It`s essentially an offer that describes the goods or services being sold, their respective prices, along with any terms and conditions that may apply. A quotation is not legally binding and is usually issued in response to a customer`s request for a price estimate.

On the other hand, a contract is a legally binding agreement between two parties. It outlines the terms and conditions of a business transaction, including the delivery of goods or services, price, payment terms, and other important details. Contracts are typically more detailed than quotations, and they require signatures from both parties to be considered legally binding.

While both quotations and contracts are important documents for businesses, they serve different purposes. Quotations are used as a tool to help a customer understand the cost of a service or product, while contracts provide legal protection for both parties in the event of a dispute.

It`s important for businesses to ensure that their quotations are accurate and detailed, and that their contracts are well-written and include all the necessary terms and conditions. Working with a legal professional or experienced copy editor can help ensure that these documents are well-crafted and legally sound.

In conclusion, while quotations and contracts may seem similar, they are not interchangeable terms. Quotations are offers of cost that are not binding, while contracts are legally binding agreements that outline the specifics of a business transaction. Understanding the differences between these two documents can help businesses ensure that they are protected legally and that their transactions run smoothly.