Estimate, quote or bid: what each word commits you to, and how the paper becomes a contract

In one paragraph

An estimate is an approximation, a quote is a firm price for a defined scope for a stated time, and a bid is an offer that becomes a contract when accepted. Customers use the words interchangeably; the law does not. Under B&P 7151.2 a home improvement contract can be oral or spread across several documents, so the estimate you texted may already be part of the deal. Write every piece of paper as if it will be read in a dispute, because it will.

The rule

A home improvement contract is an agreement, oral or written, contained in one or more documents (B&P 7151.2), and it must be in writing and state the agreed contract amount in dollars and cents, with a down payment of no more than $1,000 or 10% and payments that never exceed the value of the work performed (B&P 7159.5(a)). Every contract, subcontract and call for bid carries the license number (B&P 7030.5). To bid public work at all, the contractor must be registered with the DIR (Labor Code 1771.1(a)).

Why it matters

The number you gave 'just to give an idea' is the number the customer remembers, and if the follow-up paperwork is sloppy it may be the number a judge holds you to. Naming the document correctly, dating it, scoping it and stating what is excluded is how the estimate stays an estimate until you decide to make it a contract.

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