This clause establishes the process and terms under which a vendor provides cost estimates or quotations when a client requests variations, additional services, or custom work. It typically specifies whether quotations are binding or non-binding, how long a quote remains valid (e.g., 30 days), what assumptions underlie the quote, and what happens if the client accepts the quote but circumstances change. The clause matters because vendors need protection against clients using quotes as indefinite price locks while continuously delaying acceptance, and clients need clarity about whether a quoted price is guaranteed or subject to change. In vendor relationships, quotation procedures directly impact profitability—if quotes are binding indefinitely, vendors bear the risk of cost inflation; if quotes can be withdrawn without notice, clients lose pricing certainty.
This clause also typically addresses what happens if a client accepts a quotation: does it automatically become a binding amendment, or is additional documentation required? Does the quote include all costs, or are there potential add-ons? These details prevent misunderstandings where a client believes they've locked in a price, but the vendor believes the quote was merely preliminary.
If you're the vendor, ensure quotations are explicitly non-binding until formally accepted in writing, include a validity period (typically 14-30 days depending on market volatility), and clearly state all assumptions (e.g., "assumes current resource availability," "based on specifications provided on [date]"). Include language reserving the right to revise quotes if circumstances materially change (cost inflation, scope clarification, timeline shifts). Specify that acceptance requires written confirmation and that verbal acceptances don't bind you. If you're the client, negotiate for longer validity periods (30-60 days), require vendors to honor quotes if you accept within the validity period, and push back against "subject to change" language for fixed-scope work. Clarify whether the quotation includes all costs or if additional fees may apply, and require vendors to identify any assumptions that, if violated, would trigger a new quote.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause establishes the process and terms under which a vendor provides cost estimates or quotations when a client requests variations, additional services, or custom work.
Why should I care about this clause?
It typically specifies whether quotations are binding or non-binding, how long a quote remains valid (e.g., 30 days), what assumptions underlie the quote, and what happens if the client accepts the quote but circumstances change.
What are my options?
The clause matters because vendors need protection against clients using quotes as indefinite price locks while continuously delaying acceptance, and clients need clarity about whether a quoted price is guaranteed or subject to change.
How does this affect small businesses?
In vendor relationships, quotation procedures directly impact profitability—if quotes are binding indefinitely, vendors bear the risk of cost inflation; if quotes can be withdrawn without notice, clients lose pricing certainty.