What does replying with prices represent in terms of contractual agreements?

Replying with prices is considered a price quotation because it indicates the seller's proposed terms and potential costs for goods or services offered to the buyer. In a business context, when a seller provides a price quotation, it serves as an invitation for the buyer to consider the offer and decide whether to proceed with a contractual agreement based on those terms.

A price quotation does not imply that a binding contract has been formed; rather, it expresses the seller's intention to negotiate based on the specified prices. This is crucial in business law as it sets the stage for further discussions or negotiations. Only after both parties agree on the terms, including the quoted price, can a binding agreement be said to exist.

This understanding differentiates a price quotation from other contractual elements such as counteroffers or acceptance, which involve explicit negotiations or agreements to terms that would finalize a contract. Recognizing this helps clarify the various stages in the contract formation process, highlighting the role that price quotations play in negotiations.