Every project launch is a step into the unknown. It comes up as a result of the apprehension about failure, uncertainty, and doubt that come with each new beginning.

This begs the question… What may the project’s overall costs be?”, “And which industry should he choose?”, and ” Is an estimate illegally binding?”

There may be several discussions, meetings, and considerations before finalizing and signing any binding estimate. Therefore, since writing an estimate acts as a preliminary financial layout of the project for all parties, it considerably increases the likelihood of changes and discussions for contractors. It involves determining the project’s value, which is in many ways essential information.

Let’s get into the details of a binding estimate and understand how is an estimate legally binding.

What is a Binding Estimate?

Binding estimates are contracts in which the sum stated is the whole estimated cost you pay, regardless of any further unanticipated charges. After it is set between the parties, the dealer may not increase the lower price in any way. Accepting an official estimate, on the other hand, implies that the client will not pay any less.

A legally binding contract is one in which the sum stated is the whole cost you pay, regardless of any further unanticipated charges. When a contractor agrees to a certain price based on the customer’s generally projected activities and resources. For example, if the client accepts a binding estimate, they might prepay you a final amount.

The dealer may not increase the price in any way. Accepting an official estimate, on the other hand, implies that the client will not pay any less.

Here are some examples of how it may benefit you and your business:

  • Clients should be informed of their expectations in advance.
  • Cash flow forecasting and planning.
  • Make an impact on consumers to persuade them to hire you.
  • Make the appropriate material and supply orders.
  • Keep a copy of the agreement in case of a disagreement.

How to Make an Estimate Legally Binding?

Create a legally binding estimate using a template. It should include a description of the services you’ll be providing, their full cost, and the terms under which you’ll be engaged.

When giving a binding estimate that will be legally enforceable, be sure these points are taken care of:

  • Add all the details needed on an original estimate such as details of deadlines, costs, etc.
  • Put the estimate in writing.
  • Decide on pricing and be as accurate as you can.
  • Let the client sign the written contract. Both you and the client must take a thorough look at the estimate before both parties to sign it.

However, if the buyer accepts the offer, the agreement typically becomes enforceable against both parties.

If you begin to commit to a client, explain the final price, and give them a window of time to accept or reject it, then it is legally enforceable. It can therefore have more of a legal impact if the buyer signs it and agrees to the terms.

Why is a Written Estimate So Important?

A written estimate frequently includes information regarding the requested repair. Here are a few reasons why you should request a written estimate before having your automobile fixed.

  • A detailed breakdown of the same work that has to be done on the automobile.
  • The whole price of the project, including labor and materials.
  • A guarantee that the estimated amount won’t be increased without the client’s permission by a particular percentage or amount.
  • It might avoid a lot of future conflicts between the two parties. For the business, the written estimate acts as the parties’ equivalent of a contract.

So it makes sense to use estimating software to provide a legally enforceable estimate. It will best guess your estimate’s contents and state if the client has approved it. You’ll be able to resolve any consumer issues and uphold your established costs by using an efficient tool like Moon Invoice.

Binding Vs No-Binding Estimates

Binding Estimate Non-Binding Estimate
A legally binding estimate obligates you to pay the fixed price specified therein. Whether the service costs less or more than the total, you will still be responsible for the whole amount. The business calculates the price of a job without committing to a precise sum or final cost. This is known as a non-binding estimate. It is based on an educated guess and is used mostly by small businesses.
The additional services and resources of the company are the factors that best guess how much the deal will cost. The actual services rendered, not necessarily those stated in the non-binding contract, will determine the final costs of the business.
A contractual agreement, which must be in writing and signed by you and your moving company, guarantees the whole payment of the goods and services included in the estimate. The services provided by the company and the cost of materials will determine how much it will cost you in the end in a reasonably accurate estimate.
Instead of a price guarantee, the company provides you with a non-obligatory estimate of the full cost. Binding estimates also pose some risks. You only pay the anticipated sum at delivery when the estimate is deemed to be legally binding. You won’t have to pay more or less than necessary.

Legal Claims from Legally Binding Contracts: How to Avoid?

Here are some tips to help you avoid any legal troubles later down the road in the best way:

  • Both parties must be able to grasp the data in the estimate since it was carefully created using accurate terms in the construction industry or any other sector.
  • It needs to give customers accurate information that can prevent them from using it improperly or harmfully.
  • Modifications, changing markets, and unintended additions should all be covered in the agreement to make the terms clear.
  • For safer practice, a range of degrees of precision can be provided in just an estimate. The bid might then include a final estimate and go through the formal legally bound contract law process.


In the end, a binding estimation does much more than just assist you in maintaining your calm. Moreover, this legal document has a direct impact on the project’s performance in a variety of ways. So, we hope this article helped you comprehend the advantages of project estimation and how to do it properly. For more info, don’t forget to hop on to the FAQ section.