Quotes and estimates
We explain the difference between a quote and an estimate, plus how to avoid problems when it comes to paying the bill.
“We accepted a quote to repaint our house. The painter now wants to increase the price. Can he do this?”
In short, no. A quote is an exact price for a job and it’s binding on both parties once accepted. If you’ve already agreed to the price, the painter can’t spring an increase on you.
The painter has to wear the cost if the job takes longer than expected or requires extra materials: they can’t ask you to pay the difference just because they’ve got the sums wrong.
The law doesn’t just cover tradies. It also applies to quotes from lawyers or any other service provider. When you agree to a quote, you’ve formed a contract and both parties have to meet their obligations under the contract.
It’s a different situation if you’ve been given an estimate for a job. Unlike quotes, estimates are approximate prices. When you agree to work on the basis of an estimate, what you pay may be different, but not wildly. You should be able to rely on the tradie to give you a figure close to the true cost of the work.
Always ask to be contacted if problems crop up during a job that could affect the cost. In our opinion, it’s worth challenging a bill that’s more than 20% above an estimate.
Challenging a bill
You’ve also got grounds to challenge a bill if you’ve agreed for work to go ahead without being given any price and the amount you’re charged is excessive. Where no cost is agreed beforehand, the Consumer Guarantees Act says the price you’re billed has to be reasonable.
For example, you can rely on the act if you need to get a plumber to do urgent repairs on your property, but then get stung with a huge bill for the work done. The best way of challenging the bill is to get estimates for the same work from several plumbers, then offer to pay your plumber the average.
How to avoid problems
To minimise the risk of things going wrong:
- Get at least 3 quotes from different companies to compare prices. Ask for quotes in writing. Check the quote includes all costs: for example, if the painting job requires scaffolding, is this included in the price?
- Do your homework on the company that’s top of your list. How long has it been around? Is it a registered company? (You can find out at companiesoffice.govt.nz.)
- If the price looks steep, don’t be afraid to negotiate.
- Make sure you keep a paper trail, including quotes, emails and other correspondence.
- Be aware a service provider can charge a fee for quoting or estimating a job – but they must tell you about the fee in advance.
- If things go wrong and you can’t resolve the problem with the company, you can go to the Disputes Tribunal. The tribunal can hear claims involving sums up to $15,000, or $20,000 with the agreement of both parties.
Why join Consumer?
We’re the only New Zealand non-profit to independently put the products and services you want to buy to the test. But most of what we do is funded by our members, for our members. Becoming a member means you’ll have even more ways to get a fair deal, and choose with confidence.