What does the CPA say about quotes, written and verbal?

[adrianh]

@sterne.law@gmail.com - that's the way I understood it, thanks.

[Dave A]

I suggest one should distinguish between a quote and an estimate.

A quote is a firm offer - all that is required is for the consumer to accept the offer before the expiration of the quote to form the contract.

An estimate leaves a little more wriggle room - but take care that the cause and nature of any potential variances is disclosed in the estimate.

On errors - the supplier is on the hook if the consumer accepts an offer made in error. If the supplier makes an error in their offer, they must correct the error before the consumer accepts the offer. (I had a little chuckle at a fairly recent incident of this sort - Makro had made an error in one of their email promos - the correction notice came out about an hour later).

Ommissions are problematic in that if they are deemed deliberately misleading, again the supplier is likely to be in the firing line.

Most important of all - do not make any supply without a clear and reasonably provable indication of acceptance from the consumer of your estimate or quote.

It is probably also worth pointing out that lawful position and enforcing lawful position are two different things, particularly when the sum involved is fairly trivial.

[Justloadit]

What about the "Errors & omissions excluded" clause?

I would then suggest to add a further clause to the quote.

"The terms of this quote are subject to the issuer of this quote's formal acceptance of the quote in writing."

or words to that effect.

[Dave A]

Section 23.6 of the CPA:

Subject to subsections (7) to (10), a supplier must not require a consumer to pay a price for any goods or services—

a) higher than the displayed price for those goods or services; or

b) if more than one price is concurrently displayed, higher than the lower or lowest of the prices so displayed

On errors - section 26.9 of the CPA:

If a price as displayed contains an inadvertent and obvious error, the supplier is not bound by it after—

a)correcting the error in the displayed price; and

b)taking reasonable steps in the circumstances to inform consumers to whom the erroneous price may have been displayed of the error and the correct price.

For folks in the service industry, you also want to pay close attention to section 15.

[Justloadit]

Hi Dave,

The sections you quoted really refer to a retail store, and not so much to a written quote. A simple clause such as "while stocks last" would mean that there is a sufficiently open door to accept the order or not. Sorry client, I no longer have that stock at that price.

[adrianh]

@Justloadit - why are you not willing to stand by your quote?

[Justloadit]

Hi Adrian,

Not saying I am willing to stand by my quote. If you make a genuine mistake, you are now taken to the cleaners.

I had a recent experience in which I made an error in my quote, I only counted for 2 pins at R5 each on a job which actually had 12 pins in total. It seems insignificant, but the error was more than my profit, and having been over 70 systems supplied it hurt. I kept to my quote, simply because it is a regular customer, and purchases a huge amount from me on a monthly basis, however if it was a customer which I only see once in my lifetime, I feel that the loss would not be worthwhile, and I probably would have rejected the acceptance of the order.

That is all I am saying, as a supplier I would like to still be in control of my business, and have the final say if I wish to accept the order or not.

Ifwe are referring to a multimillion Rand tender, and acceptance means the business is bankrupt if it continues with the order, surely if the tender is accepted as the supplier you still have the right to refusal of the order, surely they can award it to the next tenderer.

[adrianh]

But at what point do you stand by your word. Is the point of preparing the quote not to ascertain exactly what it would entail to complete a task. You should be certain of your facts when you hand the quote to the customer.

The point that I am making is that you are trying to add a step to the process to double check yourself, if you did what you were supposed to correctly in the first place then the step won't be necessary. What happens if you still get it wrong the second time round, will you add a third chance?

Look, I am also in business and I also get it wrong, sometimes I bite the bullet and sometimes I try to get the customer to agree to a compromise. The best one can do is to be more careful next time but I certainly don't want to say to my customer that I am unwilling to stand by my quote because I am unsure of myself.

[Justloadit]

It's not about double checking myself, sh!t happens, and if continuation of the task becomes detrimental to the business, then the decision is about ensuring that you are available to your other loyal customers.

In my business, I have to create a new product from scratch, no past repeats, and then calculate the cost for mass production from an unfinished item, and this all is usually from the first take when not even a prototype has been done, with the emphasis of competing with the east. So it becomes extremely challenging.

Now a situation arises that we do not get every quote we do, so it requires intense concentration for a return of maybe 1 in every 10 quotes, there is bound to have errors that creep up, which arises due to the amount of information that has to be collated, each item used, which can arise to over 150 individual parts from a number of different suppliers.

Once a quote is accepted, I then do a thorough check of my initial quote. I have found that in the majority of cases I have done everything correctly, and on a small number of cases I made an error, and out of that on a rare occasion I reject the quote.

I feel as a supplier that I also have a right to accept an order or not, and this is what I am on about.

As a supplier even if my price has been quoted correctly I feel that I have a right to supply a customer or not, and this is what I feel is what I am trying to bring up in my discussion. The fact that a customer is happy with my price and accepts it, does not mean that I have now supply the goods or services, however if I have already supplied goods, and try to change the cost there off, then I feel the customer has a right to fight for the original price quoted .

There are customers who I will not supply my goods even at a higher price, simply because they are not capable of using my goods, and are constantly demanding free training or warranties, which are not due to manufacturing , but rather due to ignorance or misuse of the equipment. At this time it is cheaper to reject the sale.

[adrianh]

I still disagree with you. You are simply trying to protect yourself from yourself at the customers expense. You want to add a layer that shouldn't be there. You commit to your word when you present the quote,thats just the way that it is.

Its like getting engaged, if you are unsure about your intention or ability to stand by the commitment then you shouldnt commit, you should delay until you are ready or you should pass.

Another analogy is to point a firearm at somebody, you have to be willing to follow through and shoot the guy otherwise you shouldn't point the firearm at him.

All the above examples are the same in that there comes a commonly accepted time when there is no turning back. You are trying to change the rules to protect yourself from yourself.