by Tekle Sebhatu

Question:

In your opinion, what is the best way to make a quotation? How much information is necessary to avoid confusion at later stages of the deal, and are there parts of a quotation that may be considered to be legally binding? Thanks

Answer:

When importers request quotations, experienced exporters always provide them with a proforma-invoice. A pro forma invoice is similar to a quotation, but is more formal and if done right provides solid information to help the importer make decision. Proforma-invoice though similar is more than just a quotation. A quotation most often is an offer to sell goods at a stated price. Proforma-invoice however, resembles commercial invoice and provides information to the importer the product to be shipped including itemized list of charges, pricing terms, quantity, value, weight, size and other important specifications of the transaction. Proforma-Invoice is one of the most important and common document the importer receives prior to shipment. Many legal experts suggest that proforma-invoice is considered as a legally binding document, even though price might change prior to the final sale of the goods. When an exporter provides a proforma-invoice to the importer the importer can use the proforma-invoice to request foreign currency if his currency is not freely convertible. Proforma-invoice can also help the importer apply for a letter of credit at his bank.

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