What Is a Quotation? Meaning, Types, Example & Legal Status

By QuotApp Team · Published October 16, 2026 · Updated October 16, 2026

A quotation (or quote) is a document a seller sends to a potential buyer stating the price for specific goods or services, under stated terms, for a limited period of time. If the buyer accepts it, the quotation usually becomes the basis of the sale, which is why its scope, price and terms need to be precise.

In business, quotations sit between the buyer’s request and the final invoice. This guide explains what a quotation includes, the different types (and where they overlap with estimates and proforma invoices), whether a quote is legally binding, and how a quote moves through its lifecycle from request to payment.

Quotation meaning in plain terms

A quotation answers one question for the buyer: “If I say yes, what exactly will I get and what will I pay?” It is written by the seller, addressed to one buyer, and tied to a specific scope. That is what separates it from a price list or an advertisement, which are aimed at everyone.

In the US, people mostly say “quote” and use “price quote” or “sales quote” interchangeably. “Quotation” is the more formal word and is standard in the UK, India, Australia and much of the rest of the world. They mean the same thing.

What a quotation includes

A complete quotation has:

Seller details: business name, contact information and any required license or tax numbers.
Buyer details: name, company and the delivery or job site address.
A quote number and issue date for reference.
A description of the goods or services, ideally itemized with quantities, units and unit prices.
Totals: subtotal, discounts, applicable taxes and the grand total.
A validity period: the date after which the price may change.
Terms: payment terms, deposit, delivery or start date, warranty and exclusions.
How to accept: a signature line, an accept button or an instruction to reply.

For a section-by-section layout with a full sample, see our quotation format guide.

Types of quotations

These terms are often used loosely. Here is how they differ in practice.

Fixed-price quote

A firm price for a clearly defined scope. If the scope does not change, the price does not change. This is what most people mean by “quote” in trades and services.

Estimate

An approximate figure based on the information available. An estimate signals that the final price may move as the work reveals more. It is not a type of quote in the strict sense, but many buyers use the words interchangeably, so label your document clearly. Our guide to quote vs estimate covers when to use each.

Sales quote

The term used in B2B sales and CRM systems for a priced offer on products or subscriptions, often with volume pricing, discounts and an expiry date. Functionally it is a fixed-price quote, generated from a sales pipeline.

RFQ response

A quotation submitted in reply to a buyer’s formal request for quotation. It follows the buyer’s format and pricing table rather than the seller’s own layout. See what is an RFQ for how these work.

Proforma invoice

A document that looks like an invoice but is issued before the sale is final, often for international trade, customs, or to request prepayment. It states what the invoice will be if the order goes ahead. It is not a demand for payment for delivered goods, and it is not the same as a quote, although it commits the seller to the stated terms in a similar way.

Is a quotation legally binding?

In general, a quotation that is specific about scope, price and terms and invites the buyer to accept it can be treated as an offer. When the buyer accepts that offer, a binding contract can be formed. Before acceptance, the seller can usually withdraw or revise the quote, and once the validity period passes, the offer lapses.

A few general principles:

Specificity matters. A detailed, itemized quote addressed to one buyer looks like an offer. A general price list or advertisement usually does not.
Labels are not everything. Calling something an “estimate” signals that the price is not fixed, but courts look at the whole document and how the parties behaved.
Acceptance can take many forms: a signature, a purchase order, a reply email, or starting work with the seller’s agreement. In the US, the ESIGN Act of 2000 generally gives electronic signatures the same legal effect as handwritten ones for most commercial agreements.
Conflicting terms cause trouble. When a buyer’s purchase order contains different terms from the seller’s quote, which terms govern can become a legal question.

Contract rules vary by country, state and the type of transaction, so for high-value deals, have your standard terms reviewed by a lawyer. For practical steps to get a clear, documented yes, see our guide to quote acceptance.

Quotation vs estimate vs invoice vs purchase order

Document	Who sends it	When	Price	Purpose
Quotation	Seller	Before the sale	Fixed for the validity period	Offer a firm price for a defined scope
Estimate	Seller	Before the sale	Approximate, may change	Give a budget figure when scope is uncertain
Proposal	Seller	Before the sale	Usually included	Persuade: approach, timeline, qualifications and price
Purchase order (PO)	Buyer	After accepting a quote	Matches agreed price	Authorize the purchase in writing
Proforma invoice	Seller	Before delivery or payment	Expected final amount	Preview the invoice, support prepayment or customs
Invoice	Seller	After delivery or completion	Final amount owed	Request payment

Two related comparisons worth reading: quote vs invoice and quote vs proposal.

Short example quotation

An illustrative quote from a commercial cleaning company. Names and prices are examples.

CLEARVIEW CLEANING CO.                    QUOTE No: Q-2026-207
Austin, TX · (512) 555-0190               Date: Oct 17, 2026
                                          Valid until: Nov 16, 2026
For: Harlow Design Studio
     Suite 300, 410 Congress Ave

#  Description                           Qty    Unit    Price     Amount
1  One-time deep clean, office space    2,400  sq ft   $0.18    $432.00
2  Interior window cleaning               18   window   $8.00    $144.00
3  Carpet hot-water extraction,          300   sq ft   $0.45    $135.00
   conference room
                                                  TOTAL         $711.00

Terms: Payment due within 15 days of completion. Work performed
after 6 PM on a weekday of client's choice. Excludes exterior windows.
To accept: sign below or reply "Approved Q-2026-207."

Tax is not shown in this example; whether cleaning services are taxable depends on the state. A ready-made cleaning quote template includes these fields.

The quotation lifecycle

Most quotes follow the same path:

Request. The buyer asks for a price, by phone, email, web form or a formal RFQ.
Discovery. The seller gathers details: site visit, specs, quantities, deadlines.
Quotation. The seller sends a priced, itemized quote with terms and an expiry date.
Revision (optional). The buyer asks for changes; the seller issues a revised quote with a new version number.
Acceptance. The buyer signs, replies in writing or clicks accept.
Purchase order or contract. Larger buyers issue a PO referencing the quote number; others sign the quote itself as the contract.
Delivery or work. Any changes in scope are documented in writing before extra work starts.
Invoice. The seller bills the agreed amount, referencing the quote and PO numbers.
Payment. The buyer pays according to the agreed terms.

Keeping the same reference number from quote to invoice makes every step traceable, for you and for the client’s accounts payable team.

Creating a quotation

You can build a quotation in a word processor, a spreadsheet or dedicated software. What matters is that the scope is clear, the math is right, and the expiry date and terms are visible. The free QuotApp quote maker produces a clean, numbered PDF quotation in a few minutes, with no account required.

FAQ

What is a quote in business?

In business, a quote is a seller’s written statement of the price for a specific set of goods or services, valid for a limited time. Once the buyer accepts it, it usually becomes the agreed price for the sale.

What is the difference between a price quote and a sales quote?

There is little practical difference. “Sales quote” is the term common in B2B sales and CRM software, while “price quote” is the everyday term; both state a price for a defined scope with an expiry date.

Can a seller change a quotation after sending it?

Usually yes, before the buyer accepts it. Issue a revised version with a new version number and make clear the earlier quote is superseded.

How long is a quotation valid?

As long as the quote says. Thirty days is common for services; goods with volatile prices often carry shorter windows.