A quotation becomes binding once the customer has accepted it and all legal conditions have been met. This means that both parties have obligations: you must deliver what you have promised and the customer must pay. For hospitality and event professionals, it is important to know when a quotation becomes legally binding and how you can protect yourself.
When does a quotation become legally binding?
A quotation becomes legally binding when there is a valid agreement between you and your customer. This happens as soon as three conditions are met: acceptance, specificity and a valid period of validity.
Acceptance means that the customer has clearly said “yes” to your quote. This can be done verbally, in writing or via online signature. For catering and events, it is wise to always ask for written confirmation.
Specificity means that your quotation must be concrete. Vague descriptions such as “catering for 50 people” are not binding. You must state exactly what you are providing: which dishes, how many people, which date, time and location.
The validity period ensures that your quotation does not remain valid indefinitely. Without a clear deadline, a customer could theoretically accept it years later at the same price.
What is the difference between a non-binding quote and a binding quote?
A non-binding quote is a price indication without any obligations. You give the customer an idea of the costs, but you are not obliged to deliver if the customer agrees. This is often used during initial exploratory discussions.
A binding quotation, on the other hand, creates mutual obligations as soon as it is accepted. For hospitality quotations, this means that you must deliver what you have promised at the agreed price.
The difference lies in the wording. For a non-binding quotation, explicitly state “This quotation is non-binding” or “Prices are subject to change”. For a binding quotation, use clear, concrete language without reservations.
In practice, you often work with a combination of the two. You start with a non-binding price indication and then send a final, binding quotation when all the details are known.
How long is a quote valid for?
You determine the validity of the quotation yourself, but without a clear term, a quotation is valid for a “reasonable period of time”. For catering and events, this is usually 14 to 30 days, depending on your sector and season.
Always state a specific date in your quotation. For example, write “This quotation is valid until 15 March 2024” instead of “This quotation is valid for 30 days”. This prevents confusion and provides clarity.
For event quotes, you can apply shorter deadlines during busy periods such as the holidays. Longer deadlines are possible for large events that are planned well in advance.
After the validity period has expired, you are no longer bound by the prices. You can send a new quotation with adjusted prices or conditions.
Can you still cancel a binding quote?
In principle, you cannot simply cancel an accepted binding quotation. You have entered into an agreement and are obliged to deliver. Cancellation may result in compensation.
There are a few exceptions. Consumer contracts sometimes have a cooling-off period of 14 days. This depends on how the contract was concluded. This cooling-off period does not usually apply to business customers.
Force majeure can be a reason for cancellation. Examples include illness among your staff, delivery problems or unforeseen circumstances. Always include this in your general terms and conditions.
Mutual agreement is always possible. If both parties agree, you can terminate an agreement. Always confirm this in writing.
What conditions should you include in your quotation?
Good quotation terms and conditions protect your business and prevent misunderstandings. Start with the basics: what exactly are you delivering, when, where and at what price?
Payment terms are crucial. State when payment must be made, which payment methods you accept and what happens in the event of late payment. For catering, advance payment or a deposit is customary.
Always include a cancellation policy. Specify the deadline for free cancellation and the costs that apply after that date. For events, these are often a percentage of the total price.
Consider practical matters such as delivery terms, what happens in the event of changes, and who is responsible for which costs. Refer to your general terms and conditions for detailed provisions.
| Condition | Why it is important | Practical example |
|---|---|---|
| Validity | Prevents price fixing after a long period of time | Valid until 15 March 2024 |
| Payment term | Ensures cash flow | “Payment within 14 days” |
| Cancellation fees | Protects against loss | “50% charge for cancellations within 48 hours” |
| Terms and conditions of delivery | Clarifies responsibilities | “Including delivery within 10 km” |
What happens in the event of disputes about quotations?
Disputes about quotations usually arise due to unclear agreements or different interpretations. The best approach is prevention through clear communication and clear terms and conditions.
In the event of a dispute, first look at what exactly was agreed upon. The quotation, any email correspondence and the general terms and conditions together form the agreement. Always keep all communication.
Try to resolve disputes between yourselves first. Many problems arise from misunderstandings that can be resolved through good communication. Show understanding for the customer, but stick to your agreements.
If mutual consultation does not help, you can consider legal action. For smaller amounts, the subdistrict court has jurisdiction. For larger disputes, mediation may be a good option.
According to quotation legislation, you are entitled to fulfilment of the agreement. This means that the customer must pay what has been agreed, provided that you have delivered what was promised.
Key points to remember about binding quotes
As a hospitality or events professional, it is important to understand that a quote becomes binding as soon as it is accepted. Always ensure clear terms and conditions, concrete descriptions and a clear validity period.
Protect yourself with good terms and conditions, clear payment agreements and a careful cancellation policy. Keep all communication and ensure you have written confirmation of important agreements.
Prevention is better than cure. Invest time in creating professional, clear quotes. This prevents misunderstandings and gives your customers confidence in your professionalism.
For an efficient quotation workflow, consider using digital tools that help you create professional quotations, track status and automate follow-ups. This saves you time and ensures you don’t miss important deadlines. For more information on how to optimise your quotation process, contact specialists or schedule a brainstorming session.
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