by An offer letter in business communication is a formal proposal made by one party (the seller) to another (the buyer), showing a willingness to enter into a contract on specific terms. It includes essential details such as the description of goods or services, quantity, price, terms of payment, mode of delivery, and validity of the offer.
Offers can be general (open to the public) or specific (addressed to a particular person or organization). When the recipient accepts the offer under the stated terms, a legally binding agreement comes into effect. Therefore, an offer letter is an important legal and commercial document that initiates a transaction between two parties.
Example:
A manufacturer may send an offer letter to a retailer expressing readiness to supply 1,000 units of a product at a certain price, valid for 30 days.
Quotation Letter
A quotation letter is a formal business communication sent by a seller in response to a buyer’s inquiry. It specifies the cost, terms, and conditions under which goods or services will be supplied. Quotation letters are typically issued before an official offer or order is made, as they help the buyer compare prices and make informed purchasing decisions.
A quotation includes vital details such as product specifications, prices per unit, delivery schedule, terms of payment, taxes, discounts, and transportation costs. It helps avoid misunderstandings by clearly defining the commercial terms between both parties.
Example:
A supplier may send a quotation letter to a construction firm outlining the cost of materials, bulk discounts, delivery timelines, and applicable GST rates.
Difference between Offer and Quotation Letters
| Basis | Offer Letter | Quotation Letter |
|---|---|---|
| Purpose | To make a proposal to sell goods or services | To respond to a buyer’s inquiry by providing price details |
| Nature | Binding when accepted | Informative, not legally binding |
| Initiated By | Seller | Buyer’s request triggers quotation |
| Timing | Sent before or along with negotiation | Sent before the final offer or contract |
| Legal Effect | Creates an agreement once accepted | Serves as a basis for offer or negotiation |
Structure of an Offer/Quotation Letter:
A well-written offer or quotation letter follows a formal structure to maintain professionalism and clarity.
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Sender’s Information – Includes company name, address, and contact details.
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Date – The date on which the letter is written.
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Receiver’s Information – Name, designation, and address of the recipient.
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Subject Line – A brief line indicating the purpose of the letter (e.g., “Offer for Supply of Office Furniture”).
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Salutation – A formal greeting such as Dear Sir/Madam.
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Body of the Letter – Divided into three parts:
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Introduction: Reference to the inquiry or context.
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Main Content: Detailed offer or quotation (items, prices, terms).
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Closing Statement: Encouragement for future business or prompt response.
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Complimentary Close – Commonly Yours faithfully or Yours sincerely.
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Signature and Designation – Name and position of the authorized person.
Essential Components of an Offer/Quotation Letter:
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Description of Goods or Services – Details about the product, including size, quality, and specifications.
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Quantity and Price – The exact number of units and price per unit, including any bulk or cash discounts.
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Terms of Payment – Mode and period of payment (e.g., advance payment, credit terms, etc.).
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Delivery Terms – Expected date, mode, and place of delivery.
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Taxes and Duties – Applicable GST or other charges clearly stated.
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Validity Period – The duration for which the offer or quotation remains valid.
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Special Conditions – Warranty, after-sales service, or special discounts.
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Closing Statement – Courteous remarks encouraging acceptance or further discussion.
Sample Format of a Quotation Letter:
ABC Electronics Pvt. Ltd.
123, Industrial Area, Pune – 411001
Email: sales@abcelectronics.com
To,
The Purchase Manager
XYZ Retail Stores Pvt. Ltd.
Mumbai – 400001
Subject: Quotation for Supply of Air Conditioners
Dear Sir/Madam,
We are pleased to submit our quotation for the supply of air conditioners as per your inquiry dated 20 October 2025. Please find the details below:
| Model | Description | Unit Price (₹) | Discount | Delivery Time |
|---|---|---|---|---|
| AC-4500 | 1.5 Ton Split AC | 36,000 | 10% on 50 units | Within 10 days |
| AC-5500 | 2.0 Ton Inverter AC | 48,000 | 12% on 30 units | Within 10 days |
Terms and Conditions:
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Prices are inclusive of GST.
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Payment: 50% advance and 50% on delivery.
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Offer valid for 30 days from the date of quotation.
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One-year warranty on all products.
We look forward to a long-term business relationship.
Yours faithfully,
(Signature)
Ramesh Sharma
Sales Manager
ABC Electronics Pvt. Ltd.
Importance of Offer and Quotation Letters:
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Facilitates Business Negotiation: They provide a foundation for price discussions and finalizing deals.
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Ensures Clarity and Transparency: All terms are clearly stated to avoid disputes.
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Builds Professional Relationships: Reflects the credibility and professionalism of the sender.
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Acts as a Legal Record: Offers can serve as evidence in case of contractual disputes.
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Saves Time and Effort: Provides clear communication and avoids repetitive discussions.
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