What Is The Distinction Between Bids, Estimates, Proposals, and Contracts?

What is the distinction between bids, estimates, proposals, and contracts? Are they simply interchangeable terms?

I am not an attorney, and I will be interested to hear whether I am on the right track, but I’d guess.

Bids:

The price do some work that has been defined by a customer or you’d charge to construct something is indicated by you.

Estimates:

The price tag you’d charge to do less clearly characterized work is approximated by you, based on whatever information is available.

Proposals:

You translate a customer expressed wishes, specify in detail the way you’d fulfill with their demands and how much you would charge to do it.

Contracts:

A binding arrangement between a customer and you, complete with contingency and caveats plans describing who should do what to maintain their end of the bargain.

Might also add in quote and number and ballpark as these terms are loosely thrown about change.

I provide a proposition for all projects that are potential. A useful option to a quote is to visit a photograph of a project and say if all things were equal, how much it cost. By tying it this is the only way I’ll ballpark something I have done. Ball parking according to another individual’s work, should be done and while helpful, may be cheating a little.

When a client insists on a ballpark number, it is nearly always a sure bet we are not going to be playing on of the same field. I get as much info as possible, fill it in one of the proposition form with a price, and off it goes. You know, back when someone’s word was most we needed to make of the world go round. Hey Jack, the price tag you gave me 3 weeks ago was. A contract is merely a formal arrangement things to do something in exchange for something else. The proposition has a touch line, but even without of the signed proposal, once I cash of the check, a contract has been formed.

Clear communication in business would be as necessary and valuable as any piece of equipment.

Estimate is dependent on less than complete info and it’s only that – an estimate. Proposal is based on accurate, detailed info and you’re suggesting to do something dependent on known variables. Bid also might be utilized as a verb, which suggests it’s the act of creating an estimate. The definition that’s taught in school for of the word quote has to do with attributing something spoken or written to an individual.

I use estimates most of the time to clarify the project.