Liability When a Buyer Relies on Your Estimate

Why this matters

In a home sale your quote stops being a sales document and becomes a pricing input. The buyer's agent uses it to ask for a credit, the seller's agent uses it to argue the credit down, and the buyer closes on a number you wrote in forty minutes on a roof you could not fully see. When the real job runs higher, the buyer is out the difference, and the person who wrote the number is the easiest one to find. This card explains how that claim works, the one question that decides most of it, the language that keeps your quote from carrying more weight than you meant, and what your insurance does and does not do about it.

How a quote turns into a representation

Three terms, defined once.

• Representation. A statement of fact someone can act on. "The roof needs replacing, and replacement is about this much" is a representation. So is "the panel is fine."
• Reliance. The buyer did something because of your statement: closed, took a credit instead of a repair, waived a contingency (a condition in the purchase contract that lets the buyer walk if it is not satisfied).
• Negligent misrepresentation. A claim, under state common law, that you supplied false information in a business transaction without reasonable care, and someone relied on it and lost money. It does not require that you lied. Carelessness is enough. Lying is fraud, which is a different and worse claim that no wording on a quote protects you from.

The loss in these claims is usually pure economic loss: no one was hurt and nothing was damaged by your work, the buyer simply has less money than they expected. That matters twice, once for whether the claim can be brought at all (some states limit negligence claims for pure economic loss, though many carve out negligent misrepresentation), and once for whether your insurance responds, covered below.

The one gate: who you knew would rely, and for what

Most states that recognize the claim measure it against the Restatement (Second) of Torts, section 552, a summary of common law that courts adopt or modify state by state. Its core limit is that you owe care to the people you intended your information to guide, or knew the recipient meant to pass it to, and only for the kind of transaction you intended or knew about. It is not a duty to the world.

So the question that decides most of these cases is a factual one about your own paperwork: at the time you wrote the number, did you know, or did the document show, that a buyer would use it to price this house?

The state layer moves the gate in both directions:

• Narrower. New York applies a near-privity test drawn from accountant cases: roughly, you must have known the specific party would rely, for a specific purpose, and done something linking you to them. A quote addressed to the seller and forwarded without your knowledge is a weak claim there.
• The 552 middle. Many states follow the Restatement: a known class of people for a known kind of transaction. A quote you knew was "for the sale" can reach the buyer even if you never met them.
• Broader. A minority of states lean toward reasonable foreseeability, where it is enough that a reasonable trade would have expected a buyer to see it. In a hot sale market, almost every pre-listing quote is foreseeably forwarded.

Your own state's version is a question for an attorney licensed there. This card is not legal advice. What it can give you is the operational fact underneath: the document you produce is the main evidence of what you knew and intended, so it is the part you control.

Two quotes on the same roof

One house, one roof, one trade, two documents. The roof is a single layer of asphalt shingle over what the roofer believed was solid decking, with soft spots felt near the lower edge. The roofer walked it in forty minutes and wrote a replacement price. Call that price 1.0x.

After closing, tear-off reveals a second layer underneath and rotted decking across about a third of the roof. The final job runs 1.6x. The buyer had negotiated a seller credit equal to 1.0x, so they are short 0.6x of the original quote and they want it from someone.

Quote A. Addressed to the seller by name. Header line: "Prepared for the property owner for budgeting. Not intended for use in setting a sale price or credit." Scope: "Visual inspection from the roof surface, about 40 minutes. Decking not exposed. Number of existing layers not verified. Decking replacement is excluded and priced per sheet if found, at the per-sheet rate shown." Valid 30 days. Photos of the soft area attached.

Quote B. The buyer's agent called, said "the buyer needs a number to replace the roof for the credit request," and the roofer texted a single figure, then emailed a one-line quote: "Replace roof, complete," same price, addressed to the agent.

Run the gate on each:

• Did the document show a buyer would rely? A: it says the opposite, in writing, and it names the seller. B: the roofer was told it was for the credit, and the quote went to the buyer's side.
• Was the information false? Both said roughly the same thing. But A told the truth about its own limits: layers not verified, decking excluded, a per-sheet rate for what might be found. B said "complete," which is a statement that the price covers the whole job.
• Was the reliance reasonable? Relying on A for a fixed credit means ignoring the exclusion printed on it. Relying on B is what B invited.

The outcomes differ. Under A, the buyer's claim runs into a document addressed to someone else, disclaiming the use they made of it, and disclosing the exact conditions that drove the overrun; the 0.6x was priced in advance as decking at a stated rate. Under B, the roofer knew the purpose, wrote "complete," and excluded nothing.

What would change it. In a broad-foreseeability state, A's addressing does less work, because a forwarded pre-listing quote is foreseeable whatever the header says, and the scope disclosures carry the defense alone. In a near-privity state such as New York, even B may fall short if the roofer never had direct dealings with the buyer, though texting the buyer's agent on request is the kind of link that test looks for. And in no state does A protect the roofer who saw the second layer at the drip edge and wrote "layers not verified" anyway; that is a known fact concealed, and the disclaimer becomes evidence against them.

Scope language that limits reliance

Wording does not decide a lawsuit, and its legal effect is your attorney's call in your state. What wording does is set down, on a date, what you saw, what you did not, and who the number was for, which is what the gate above turns on. Every quote that might touch a sale carries these:

• Addressee and purpose. The name of the party who engaged you, and a line saying what the quote is for. If it is for the transaction, say so, and then the scope lines below matter more.
• Method and time. "Visual, from the surface, about 40 minutes." It tells a later reader how much confidence the number deserves.
• What was not seen. Concealed spaces, decking, inside walls, below slab, a component you could not reach. Specific beats generic: "decking not exposed" is worth more than "hidden conditions excluded."
• Assumptions the price rests on. Number of layers, code edition, existing wiring size, a working shutoff. When the assumption is wrong, the quote already said the price changes.
• Pricing for the likely unknowns. A per-sheet, per-foot or per-hour rate for the condition most likely to turn up. This converts an open-ended overrun into a number the buyer could have read.
• A validity window. Thirty days is a common starting point; tune to your materials market.
• A version number. "Rev 2" with a date, so nobody can negotiate on Rev 1 after you corrected it.

What the wording does not do: protect a number you knew was wrong, or a condition you saw and left off. It also does not cover what you say out loud. The verbal figure in the driveway and the single-number text message are representations with no scope attached, and they are the most common way a careful written quote gets bypassed.

What your insurance does and does not cover

This is the part owners most often have backwards. Check every point with your own agent, because policy forms and endorsements vary.

• General liability (CGL). The standard commercial general liability policy pays for bodily injury and property damage caused by an occurrence (an accident). A buyer who is short 0.6x of a roof price has suffered neither; their loss is economic. Many CGL policies therefore do not respond to a pure bad-estimate claim at all, though most will still give you an answer in writing, which is worth having early.
• Professional services exclusion. Many CGL forms exclude injury arising from rendering professional services, and an inspection or evaluation can fall inside that wording.
• Errors and omissions (E&O) or professional liability. Covers financial loss from your advice, evaluations and reports. Home inspectors carry it routinely; most trades do not, and a shop that sells inspections or written evaluations to buyers should price adding it. It is usually claims-made: it covers claims first made while the policy is in force, so letting it lapse ends cover for work you already did unless you buy an extended reporting period (often called tail).
• A contractor's E&O endorsement sometimes exists as an add-on to a contractor package. Ask whether it reaches estimates and evaluations or only design work.

Three questions to put to your agent, in writing: does my policy respond to a claim of financial loss from an estimate a buyer relied on; does it exclude professional services or inspections; and if I sell written pre-purchase evaluations, what do I need to add. The answer to the first decides whether you have a defense lawyer paid for, which in a small claim is often worth more than the indemnity.

The paths a careful quote gets bypassed

New failure modes, none of them a wording problem:

• The forward you did not know about. A seller sends your quote to the buyer's agent. Your document cannot stop that, which is why the addressee and purpose line is written assuming it will happen.
• The second opinion you are asked to match. An agent calls and asks you to "confirm" another company's number. Confirming without your own look is adopting their representation with your name on it.
• The edited PDF. A quote retyped into a credit addendum loses its exclusions. Keep your own copy, sent by a method that records the date, so you can show what you actually wrote.
• The tech who answers the question. "About how much to replace it?" asked at the door by a buyer during your visit for the seller. Train the answer: "I'll put that in writing, with what I could and couldn't see."

How to check your own template

Pull the last five quotes your shop wrote for anything near a sale and read each one as the buyer's lawyer would. For each, can you answer from the document alone: who was it for, what was it for, how long did you look, what could you not see, which assumption most likely fails, and what does that cost per unit? If any of the six is missing on more than one of the five, the template needs the field, not a reminder. Then send your agent the three questions above and file the reply with the policy.

References

• Restatement (Second) of Torts, section 552, Information Negligently Supplied for the Guidance of Others, as adopted or modified by your state's courts.
• Your commercial general liability policy declarations, insuring agreement and exclusions; your agent's written answer on estimate and evaluation claims.
• See related: Who Is Your Customer in a Real Estate Deal
• See related: Repair Versus Credit at Closing
• See related: The Buyer Sues After Closing and Names You