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Where contracts for the purchase of products or services were being agreed but a) The seller was unsure as to the precise cost of providing goods or services and b) the buyer wanted flexibility over the total amount (and so cost) of products or services bought.

For example, software development often progresses on the basis that overall development costs are not known but on the basis of an estimate smaller items of work can be agreed for a certain cost.

Another example could be where a building or structure such as a bridge is being built and the costs of materials, iron or concrete, may vary.

The total cost of the entire project in both cases can therefore only ever be an estimate.

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15y ago

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