How to Write a Quote With a Price Range and a Cap

The direct answer: put the range, the cap and the extra-hours rule in writing

A price range is a low and a high figure for work whose final size you cannot yet see. A cap is the most the client will pay without signing off more. The extra-hours rule says what happens if the work runs past the cap. Put all three in the quote, in plain words, and ask the client to accept the quote in writing before you start.

The legal reason to be exact is strongest where the client is a consumer. In the United Kingdom, section 51 of the Consumer Rights Act 2015 (in force from 1 October 2015) says that if a service contract neither fixes a price nor explains how it will be fixed, the consumer must pay a reasonable price for the service, and no more. The explanatory notes published on legislation.gov.uk add that what counts as reasonable is a question of fact. A range with a stated method for working out the final amount gives the contract a price mechanism, so the client is not left to guess.

In the European Union, Directive 2011/83/EU on consumer rights (adopted 25 October 2011) requires a trader selling to a consumer to give the total price including taxes. Where the price cannot reasonably be calculated in advance, the trader must state how it will be calculated, and any additional charges that may be payable. Article 6(1)(e) sets this out for distance and off-premises contracts, and Article 5(1)(c) covers in-person sales. The same idea applies to your quote: if the final figure is unknown, you must show how it will be reached.

In Australia, the Australian Consumer Law does not regulate the level of prices for products and services, according to Consumer Affairs Victoria. It does require that a price you state is not misleading, under section 18 of Schedule 2 to the Competition and Consumer Act 2010. Western Australian consumer guidance adds that an estimate is an educated guess, and that the final figure can be higher or lower. Read together, these sources point to one habit: label a figure as an estimate, a range or a fixed price, and never let the client mistake one for another.

How to work out the figure step by step

Start with the scope, not the price. Write down every deliverable the client has asked for, in the order you will do it. Keep each item small enough that you can estimate it. A line such as "redesign the website" is too big. "Set up five pages and a contact form" is workable.

Next, estimate hours for each item twice: once for the likely low case and once for the likely high case. The low case assumes the client gives clear feedback and the data is ready. The high case allows for one more round of changes and some missing information. Write your reasons next to the numbers. A client who sees why the high case is higher is less likely to dispute it.

Multiply the hours by your hourly or day rate. Add any fixed costs you pay to third parties, such as software licences, domain fees, travel or materials, and say whether they are inside the range or billed at cost. Then add sales tax or VAT as a separate line, because the EU and UK rules both focus on the total price the client will actually pay.

Set the cap. A useful starting point is the high end of the range, because that is the figure you already told the client was possible. Do not set the cap below the high end, or the range means nothing. Set the extra-hours rate at your normal rate, not a penalty rate, and say that it applies only after written approval.

Finally, set a date on which the quote expires, and a point in the work at which you will warn the client. Western Australian guidance notes that quotes and estimates can carry an expiry date. A warning point, such as "when 80 per cent of the cap has been used", is a practice choice of your own, not a legal rule, but it stops surprises.

Worked example: a website project with a cap

Suppose you are quoting a small business for a five-page website. Your rate is 80 US dollars per hour. This is an illustrative example with made-up hours, not a benchmark for your market. You break the work into three parts.

The quote then reads: the estimate is between 2,880 and 3,840 US dollars plus any sales tax. The cap is 3,840 US dollars. Work beyond the cap is charged at 80 US dollars per hour, and only after the client approves it in writing. Hosting and domain fees are billed at cost and are not included in the range. The quote expires 30 days after issue.

Now suppose the client asks for a large number of changes. Discovery takes 10 hours, the build takes 30 hours, and revisions take 14 hours. That is 54 hours, or 4,320 US dollars. The cap is passed by 480 US dollars, which is six hours. You stop work, send the client the message below, and continue only when the client replies in writing. If the client declines the extra six hours, you finish the agreed scope or agree a reduced scope with the client.

The cases that change the answer

Fixed price, range and time-and-materials are three different contracts. A fixed price means you carry the risk of overruns. A range with a cap shares that risk, but only up to the cap. Time and materials puts most of the risk on the client, which usually needs a stronger record of hours and more frequent invoices. Choose the type before you write the words, because the wording depends on it.

A minimum charge changes the low end of the range. If your firm charges a minimum fee for any engagement, the low end cannot be below that fee, even if the hours add up to less. Say so in the quote, so the client does not think the low figure is a promise you have failed to meet.

Client cancellation changes what the client owes. For consumer contracts in the EU, Directive 2011/83/EU includes withdrawal rules for distance and off-premises contracts, and the trader may require payment for the part of the service already provided. Your quote should say how a cancellation mid-project is paid, and it should match the rules that apply to your client. Under UK section 51, the reasonable price rule still applies where no price was fixed, so a clear cancellation clause protects both sides.

Exclusions protect the range. Materials, travel, licences, translation, legal review and third-party fees usually sit outside the estimate. List them by name. An unlisted cost is the most common reason a client feels misled, even when the range itself was honest.

Caps are not a limit on your liability. A cap limits what the client pays without new approval. It does not stop you doing the work, and it does not limit a client's legal rights if the work is poor. Keep the quote and the warranty terms separate, and check the warranty wording with a lawyer.

Common mistakes

The first mistake is a range with no stated assumptions. "Between 3,000 and 5,000" tells the client nothing about why. Add two or three assumptions, such as the number of rounds of feedback or the client supplying the content by a date.

The second mistake is a cap that is set too low. If the cap is below the high estimate, you will be asking for approval on work you already expected. Set the cap at the high end of the range.

The third mistake is approval by phone or in a casual message. Approval should be in writing, with the new hours and the new total. A reply such as "fine, go ahead" to a message that did not state the amount is weak evidence if the invoice is disputed.

The fourth mistake is leaving taxes out. If the figure is shown before sales tax and the client expects the total, the quote can look misleading. Show the tax line separately, as the EU directive asks for consumer contracts.

The fifth mistake is a quote that never expires. Costs and capacity change. A quote with an expiry date lets you refresh the figure without a dispute.

The wording to use when the cap is passed

Send this message as soon as you can see the cap will be exceeded, before you do the extra work:

"We have used 46 of the 48 agreed hours and the revisions are not yet finished. Completing the current scope needs about six more hours at 80 US dollars per hour, a total of 480 US dollars above the agreed cap of 3,840 US dollars. Please reply in writing to approve these extra hours, or tell us which items to pause. We will not start the extra work until we receive your approval."

Keep the tone factual. Do not apologise for the estimate, and do not describe the extra work as a surprise. Attach a list of the changes that caused the overrun, so the client can see the cause.

What to check with a lawyer or accountant

Confirm which consumer rules apply to your client. The UK and EU consumer rules above cover consumers. Business-to-business contracts follow other rules and the terms both sides agree, so ask a lawyer whether any statute applies to your client. Ask your accountant how sales tax or VAT should appear on a range quote, and whether a deposit should be taken up front. Check the cancellation and warranty wording before you reuse a template. This explains the rule in general terms; it is not legal or tax advice for your case.

Where routine quoting work can be automated

Much of the work in a quote is repeated: pulling the scope from a template, calculating the low and high totals, adding tax lines and tracking how much of the cap has been used. AiStaffo builds AI workers that take over routine business work such as data entry, follow-ups and billing documents. For a quote like this one, an AI worker could read the agreed scope, apply your hourly rates and cap, produce the quote, and draft the cap-warning message when the hours reach the threshold. A person still checks the scope, approves the wording, and decides whether to ask for more hours.