You must not mislead customers when giving quotes and estimates, or in your invoices.
Consumers must be able to rely on a quote or estimate as these help them make a decision about whether to purchase the goods or services.
What is a quote?
A quote is an offer to do a job for a certain price.
If the customer accepts the quote, then there is a contract for you to do the work for that price. If there is extra work involved that was not covered by the original quote, you must have agreement from the customer to change the price.
What is an estimate?
An estimate is the nearest price, or range of prices, that you can give based on past experience.
If there may be any significant variation from the estimated price, you should make this, and the nature of the possible variation, very clear to the customer. All limits and conditions must be clearly spelled out. You must make the estimate honestly, based on reasonable grounds and assumptions.
How do I provide the quote or estimate?
It is good business practice to put quotes and estimates in writing, however, there is no distinction in the law between an oral or written quote or estimate.
You must disclose any charge for giving a quote or estimate before agreeing to provide it and quotes or estimates should be inclusive of GST.
Example: A septic tank cleaning company misled customers as to why final invoices for completed work were considerably higher than the original quote, in some cases up to 300% more. Reasons given for the increase were in some cases untrue or did not justify the significantly higher cost. The company and its director were convicted and fined.
If you have provided a quote or estimate for a specific product, you must provide that product. If you are unable to supply the product you quoted for, you must get agreement from the customer before providing an alternative.