Is Quotation a Contract

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asked on Jul 29, 2020 at 12:47
edited on May 11, 2021 at 18:31
A transport company has given me a Quotation for transport charges per carton and stated minimum monthly commitment charges: 2,000 carton or RM15,000 whichever is higher. We have used their services for one week and were not satisfied with their service. There were late deliveries and a few damaged consignment goods. Thus we stopped using them. But they are charging us the balance of RM9,000++ (after deduct the actual service charges). This is so call shortfall charges. This company is now getting a Debt Collector to collect the said money from us. 

Shall we pay this? Hope someone can advice on this matter. Thank you. 
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2 Answers

answered on Jul 29, 2020 at 14:39
edited May 11, 2021 at 18:32
The quotation itself is not a contract.
However the acceptance of the terms of the quotation is a contract.
They quoted a minimum RM15k a month, you accepted, so pay RM15k lah.
Quality of service is not important because it is subjective.

Just like if you order a plate of Char Koay Teow, if the taste is not nice also you have to pay for it in full.
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answered on May 16, 2022 at 20:36
edited May 16, 2022 at 20:42
by   jeff005
A Quotation offered (just like a MOU) is a prelude to an agreement to be signed and agreed upon by both parties.

In the absence of a properly signed and drawn contract of service, either party cannot hope to launch a successful lawsuit against each other. This is a pure waste of legal fees for both parties.

In business laws and laws of contract, there is offer letter and there must be acceptance of the offer and then a subsequent drawn up contract of service (as this case is a about a contract of services not a buy and sell situation) between both parties.

Delayed deliveries can be rectifiable and improved to the satisfaction of both parties, damaged goods can be claimed against insurance.
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