Define: Estimated Price
Estimated Price is a contract term describing the projected, non-final cost of a product, property, or service whose exact scope is not yet fully defined. It gives parties a working budget figure for planning and negotiation purposes, while making clear the actual price may change once final specifications, quantities, or conditions are confirmed.
Legal accuracy standard set & glossary spot-checked by Imad Mohammed Nazar , Skadden-trained M&A lawyer, Legal Engineer at GenieAI
What Estimated Price Means in a Contract
An Estimated Price is a contractual figure that represents the anticipated cost of goods, property, or services before all relevant details have been finalized. It is not a fixed, binding sum but rather a working approximation that helps both parties plan budgets, allocate resources, and begin negotiations before the full scope of work or specifications are locked down.
Because the underlying product or service is often undefined at the time the estimate is given, the Estimated Price functions as a placeholder figure. It signals to both parties that further clarification, measurement, or agreement is required before a firm price can be set. This distinguishes it from a fixed price or a guaranteed maximum price, both of which carry stronger contractual commitments.
In many agreements, particularly those involving Relevant Circumstances
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