▷ Estimating costs in commercial transactions: it doesn't always have to be free!

In everyday life the terms offer and quote are often used interchangeably. Both give the customer an overview of the costs incurred and allow a price comparison. From a legal perspective, however, the offer and the cost estimate must be considered separately.

A bid specifies a legally binding sum, whereas a cost estimate does not. If an offer is made, it is unlikely that the trader will subsequently be able to request a different amount. Unless otherwise communicated, the offer is subject to its price.

The cost estimate is a special form of offer. It includes all the expected costs that the supplier will incur for a good or service. In the craft sector, the hours of work and materials are listed, followed at the end by the total amount. On this basis customers usually decide for or against a craftsman. The cost estimate provides a rough overview of the costs incurred in building or renovating a house. Unlike an offer, the cost estimate is not binding. Provides a rough estimate of costs, but the price may vary within a certain range (see below for details). After all, without planning, the work could take longer or the material costs could be increased in the meantime.

The legal framework (legal situation)

As regards the legal framework of the offer, the Civil Code (BGB) states: «Whoever proposes to another the conclusion of a contract is bound by the request, unless he has excluded the obligation». In principle, the offer is linked to a price. However, there are three formulations that place an offer in a free framework:

non-binding
while stocks last
Prices subject to change

These are so-called termination clauses by which an offer is not bound. This makes it clear to the supplier that his offer may vary and there may be a price deviation.

The validity of the offer depends on the individual agreements. If no deadline has been set, the general rules of § 146 BGB apply: an offer lapses if it is not accepted or rejected in a timely manner.

A cost estimate is usually non-binding because it includes costs that cannot be clearly calculated. It must have certain contents for it to be legally valid. These include:

Type and scope of work
the time required
Travel costs
Material costs
a period of time for activities

The last point is especially important because it can counteract price fluctuations in terms of wages and materials. If costs are still exceeded, which is not uncommon, these additional costs may amount to only 10 to a maximum of 20%. In general: For the scope of the estimate and its binding nature, prior agreement with the customer is decisive.

Special case: cost estimates in the automotive sector

Damage to your car caused by the fault of others will be compensated by the opposing insurance company. Often you get a quote from the repair shop and then simply receive the insurance money without the repair being done. The order itself is usually not executed because the damage to the customer is not particularly significant. In the automotive industry it is common practice to tie cost estimates to a price so that the exact extent of the damage can be determined.