What is a quotation in the context of commercial contracting?

A quotation in commercial contracting refers specifically to a fixed price offer based on indicated quality. This means that the supplier provides a detailed price proposal to the buyer for goods or services, specifying the costs associated with particular specifications and quality levels. This allows the buyer to understand the financial commitment required for the procurement and aids in making informed purchasing decisions.

A quotation typically includes the costs associated with fulfilling the client's specific requirements, ensuring that both parties have clarity on what is being offered. It serves as a basis for the buyer to assess the price in relation to the quality and quantity of the items or services needed, contributing to effective supplier selection and contract negotiation.

The other options do not accurately describe a quotation. For example, an informal agreement between two parties lacks the formal pricing structure and specificity that characterizes a quotation. A legal binding contract implies a more formalized and enforceable agreement, which is beyond the scope of what a quotation typically entails. Lastly, while negotiation tactics are involved in the bidding process, a quotation itself is not a tactic but rather a definitive offer that may be used in negotiations.