Commercial Quotation template

Overview

A commercial quotation (or quote) is the document a supplier sends a prospective customer, setting out the price and terms on which it is willing to supply specified goods or services. Under English contract law, a quotation is generally treated as an invitation to treat or, if sufficiently definite and expressed as a firm offer, as an offer capable of acceptance by the customer — the wording used matters, since only an offer creates a binding contract once accepted, whereas a mere invitation to treat requires the supplier's separate acceptance of the customer's order. To avoid ambiguity, a well-drafted quotation should say expressly whether it is a binding offer, for how long it remains open (its validity period), and on what terms acceptance is to be communicated. Where the quotation is addressed to a consumer rather than a business, the price and key characteristics given must not be misleading under the Consumer Protection from Unfair Trading Regulations 2008, and, once a contract results, the Consumer Rights Act 2015 implies terms as to satisfactory quality and description that cannot be excluded. Between businesses, the quotation should also flag whose standard terms and conditions will govern the resulting contract, to avoid a 'battle of the forms' dispute if the customer's purchase order refers to different terms. When to use it: whenever a supplier wants to give a prospective customer a firm, time-limited price for specified goods or services before a contract is formed. Parties: the supplier (who issues the quotation) and the prospective customer (who may accept it to form a contract). Key clauses: a unique quotation reference and issue date; description, quantity and specification of the goods or services quoted; price (stating clearly whether VAT is included); the validity period of the quotation; delivery or performance timescale; payment terms; a statement of which standard terms and conditions will apply to any resulting contract; and clear instructions on how the customer should accept the quotation. Pitfalls to avoid: leaving the quotation open-ended with no expiry date, which can leave a supplier bound to outdated pricing if costs rise before the customer accepts; failing to state whether the quoted price is inclusive or exclusive of VAT, which causes downstream invoicing disputes; and not specifying which party's terms and conditions will govern the contract, leaving this to be resolved by the 'battle of the forms' if the customer's own purchase order references different terms.

Information to customize

• Supplier's registered name

• Supplier's registered address

• Customer's name

• Customer's address

• Quotation reference number

• Description of goods/services quoted

• Quoted price

• VAT treatment

  E.g. price excludes VAT, or price includes VAT.

• Validity period of this quotation

• Delivery or performance timescale

• Payment terms

• Reference to supplier's standard terms and conditions

• How the customer should accept this quotation

• Date of issue

Customize your template

Frequently asked questions

Is a quotation legally binding once sent to a customer?

It depends on the wording. A quotation can be a firm offer, binding the supplier once accepted, or a mere invitation to treat requiring the supplier's separate confirmation of the order — the document should state clearly which it is intended to be.

How long should a quotation remain valid for?

It should always state a clear validity period. Without one, a supplier can find itself bound to outdated pricing if the customer accepts after costs have risen, or face disputes over whether the quotation can still be accepted at all.

Should the quoted price include or exclude VAT?

This should always be stated explicitly. Ambiguity over VAT treatment is one of the most common sources of invoicing disputes once a contract is formed from an accepted quotation.

What happens if the customer's purchase order has different terms to the quotation?

This can trigger a 'battle of the forms', where the terms of the last document sent before performance begins tend to prevail. Stating clearly in the quotation which terms and conditions will apply reduces this risk.

Can a supplier withdraw a quotation before the customer accepts it?

Generally yes, provided the quotation has not already been accepted and is not expressed as irrevocable for its validity period — the withdrawal must reach the customer before acceptance to be effective.

Related templates