Essential Terms and Conditions for Business Quotations

January 15, 2025• 7 min read

Terms and conditions in your quotation aren't just legal jargon - they protect your business from scope creep, payment disputes, and costly misunderstandings. Yet most small businesses either skip them entirely or copy generic templates that don't fit their industry.

In this guide, you'll learn exactly what terms and conditions to include in your quotations, with ready-to-use templates you can customize for your business.

Why Terms and Conditions Matter

Adding terms and conditions to your quotations:

• ✓ Sets clear expectations with clients
• ✓ Protects you legally if disputes arise
• ✓ Defines payment terms upfront
• ✓ Prevents scope creep and extra work requests
• ✓ Makes you look professional and established

"I lost $3,000 on a project because my quotation didn't specify what happened if the client delayed providing materials. Now every quotation has clear terms about client responsibilities." - Mike, Contractor

Essential Terms Every Quotation Should Include

1. Parties

What to include:Clearly identify who the quotation is between.

Template:

Parties.This quotation is between [Your Business Name] ("Seller" or "Service Provider") and [Client Name/Company] ("Buyer" or "Client").

Why it matters:This establishes the legal relationship and who is bound by the agreement once accepted.

2. Validity Period

What to include:How long the quoted price is valid.

Template:

Validity.This quotation is valid for 14 days from the date of issuance. After this period, prices and terms are subject to change.

Why it matters:Prevents clients from accepting old quotes when your costs have increased. Common validity periods:

• Services: 14-30 days
• Products with fluctuating costs: 7-14 days
• Custom work: 30-60 days

3. Payment Terms

What to include:When and how payment is due.

Template:

Payment.Payment terms are as follows:

• 50% deposit required upon acceptance of quotation
• Remaining 50% due within 7 days of project completion
• Late payments (over 30 days) may incur a 2% monthly interest charge
• Accepted payment methods: Bank transfer, credit card, PayPal

Industry variations:

• Contractors:Often use milestone payments (33% upfront, 33% mid-project, 34% completion)
• Freelancers:Common to require 50% deposit, 50% on delivery
• Product sales:Often 100% payment before shipping, or Net 30 for established clients

4. Delivery Timeline

What to include:When work will be completed or products delivered.

Template:

Delivery.Work will commence within 5 business days of receiving the deposit. Estimated completion is 2-4 weeks from project start date. Timeline is subject to timely provision of required materials/information from Client.

Pro tip:Always build in buffer time. Underpromise and overdeliver.

5. Cancellation Policy

What to include:What happens if either party wants to cancel.

Template:

Cancellation.

• Client may cancel within 48 hours of quotation acceptance with full refund
• Cancellations after 48 hours: Deposit is non-refundable; Client pays for work completed to date
• Seller reserves the right to cancel if Client breaches payment terms

6. Ownership and Payment

What to include:When ownership transfers (crucial for protecting payment).

Template:

Ownership.For physical goods: Title and ownership remain with Seller until full payment is received. For services/digital work: Final deliverables will not be released until payment is received in full.

Why it matters:This is your leverage. Without it, clients can take your work without paying.

7. Warranty/Guarantee

What to include:What guarantees you offer (and don't offer).

Template:

Warranty.Products are covered by a 12-month warranty against defects in materials and workmanship. Warranty does not cover damage from misuse, accidents, or normal wear and tear. Services are guaranteed to meet specifications outlined in this quotation.

8. Returns and Exchanges

What to include:Your return/refund policy (if applicable).

Template:

Returns.Physical products may be returned within 14 days of receipt if unused and in original packaging. Return shipping costs are the responsibility of the Client. Custom or made-to-order items are non-returnable. Services are non-refundable once work has commenced.

9. Scope Changes

What to include:How changes to the original quotation are handled.

Template:

Variations.Any changes to the scope of work outlined in this quotation must be agreed upon in writing by both parties. Additional work will be quoted separately and may affect the delivery timeline and total cost.

Why it matters:This prevents "while you're at it, could you also..." requests that eat into your profit.

10. Liability Limitations

What to include:What you're NOT responsible for.

Template:

Liability.Seller's liability is limited to the total value of this quotation. Seller is not liable for:

• Indirect, consequential, or incidental damages
• Damages occurring during shipping (covered by carrier insurance)
• Delays caused by factors beyond Seller's control
• Client's failure to provide required information/materials

11. Governing Law

What to include:Which jurisdiction's laws apply.

Template:

Governing Law.This quotation shall be governed by and construed in accordance with the laws of [Your State/Country]. Any disputes will be resolved in the courts of [Your Jurisdiction].

12. Confidentiality

What to include:How confidential information is handled.

Template:

Confidentiality.Both parties agree to keep all information exchanged in relation to this quotation confidential. This includes pricing, specifications, and proprietary business information.

13. Intellectual Property

What to include:Who owns the work/designs (especially for creative services).

Template:

Intellectual Property.

• Pre-existing IP: Seller retains all rights to pre-existing intellectual property, templates, and methodologies
• Work product: Upon full payment, Client receives license to use deliverables for agreed-upon purposes
• Portfolio use: Seller reserves the right to use completed work in portfolio/marketing materials unless otherwise agreed

14. Force Majeure

What to include:Protection from events beyond your control.

Template:

Force Majeure.Neither party shall be liable for failure to perform obligations due to circumstances beyond their reasonable control, including but not limited to natural disasters, pandemics, government actions, or supply chain disruptions.

15. Indemnity

What to include:Who is responsible if things go wrong.

Template:

Indemnity.Client agrees to indemnify and hold Seller harmless from any claims, damages, or expenses arising from:

• Client's use of products/services in violation of applicable laws
• Third-party claims related to materials provided by Client
• Client's breach of these terms and conditions

16. Communication and Notices

What to include:How official communications should be sent.

Template:

Notices.All official notices regarding this quotation must be sent in writing to the addresses/email addresses provided by each party. Notices are considered delivered when sent via email or 3 business days after postal mailing.

Complete Terms and Conditions Template

Here's a ready-to-use template combining all essential terms:

Industry-Specific Considerations

For Contractors & Construction

Add these specific terms:

• Permit responsibility (who obtains and pays for permits)
• Site access requirements and hours
• Change order procedures
• Cleanup and disposal responsibilities
• Damage to existing property
• Weather delays

For Freelancers & Consultants

Add these specific terms:

• Number of revision rounds included
• Response time expectations from client
• Meeting/call limits
• What happens to unused hours (if hourly)
• Kill fee for early termination

For Product-Based Businesses

Add these specific terms:

• Shipping method and insurance
• Inspection period upon receipt
• Restocking fees
• Minimum order quantities
• Backorder procedures

Common Mistakes to Avoid

1. Using Generic Templates Without Customization

❌ Copying terms from the internet that don't match your business

✅ Customize every template to your specific industry and business model

2. Making Terms Too Complex

❌ Using complicated legal jargon clients can't understand

✅ Use clear, simple language. If clients don't understand, they won't sign.

3. Forgetting to Update Terms

❌ Using the same terms from 5 years ago

✅ Review and update annually or when business practices change

4. Not Getting Legal Review

❌ Never having a lawyer review your terms

✅ Have a lawyer review once, then reuse (investment that pays off)

How to Present Terms and Conditions

Option 1: In the Quotation Document

Include a "Terms and Conditions" section at the bottom of your quotation. This ensures clients see them before accepting.

Option 2: Separate Document Referenced

Include a line in your quotation: "This quotation is subject to our standard Terms and Conditions, available at [URL]"

Option 3: Acceptance Checkbox

For digital quotations, add a checkbox: "I have read and agree to the Terms and Conditions" before they can accept.

Legal Disclaimer

Important: This article provides general information and templates for educational purposes only. It is not legal advice. Terms and conditions should be reviewed by a qualified attorney in your jurisdiction before use. Laws vary by country, state, and industry.

Final Thoughts

Good terms and conditions aren't about being difficult or distrusting clients - they're about setting clear expectations that protect both parties. The best client relationships start with crystal-clear agreements.

Ready to create professional quotations with proper terms and conditions built in? SendMeQuotation.today makes it easy to save your standard terms and include them automatically in every quote.