Definition
Quotations of prices on an exchange are the publicly reported bid, ask, or transaction prices for securities, commodities, or other instruments as recorded and disseminated by an organized exchange or market. These quotations reflect the prices at which buyers and sellers are willing to transact — or at which transactions have actually occurred — at a given moment or during a given trading session.
In legal contexts, price quotations serve two primary functions:
1. EVIDENTIARY VALUE: Exchange quotations are used as proof of market value in litigation, particularly in cases involving damages, valuation of estates, tax assessments, insurance claims, and the fair value of securities in corporate transactions. Courts have generally admitted official exchange quotations as an exception to the hearsay rule on the ground that such records are made under conditions ensuring reliability — systematic, continuous, and subject to regulatory oversight.
2. CONTRACTUAL AND REGULATORY REFERENCE: Price quotations serve as reference points in commercial contracts (e.g., commodity supply agreements keyed to exchange prices), margin requirements, mark-to-market accounting, and regulatory compliance thresholds.
A quotation is not necessarily a completed transaction price. A bid quotation reflects what a buyer will pay; an ask (or offer) quotation reflects what a seller will accept. The last sale price reflects an actual transaction. In legal proceedings, the distinction matters: a bid or ask price establishes the range of market value, while a transaction price establishes what value was actually realized.
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Common Language
Modern common usage (Wiktionary): "Quotation" in financial contexts refers to the current price at which a stock or other security can be bought or sold, as reported by a market or exchange.
Historical common usage (Webster's 1913): "The naming or publishing of the current price of stocks, goods, etc.; also, the price named." Webster also noted the use of quotation in mercantile practice as the written statement of prices offered.
The gap between ordinary commercial usage and legal usage is narrow but significant. In everyday financial language, a "quote" is simply a price. In legal proceedings, exchange quotations carry specific evidentiary weight — they are treated as a class of reliable market record admissible to establish value, not merely as informal price references. The legal significance lies in the institutional context of the exchange that generates them, not merely in the number itself.
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Why It Matters in Research
**Evidentiary admissibility.** The legal treatment of exchange quotations as admissible evidence of market value has a long doctrinal history. Researchers working in commercial law, securities litigation, estate and tax disputes, or condemnation proceedings should recognize that courts applying the business records exception or market reports exception to the hearsay rule treat official exchange quotations differently from informal price estimates or broker opinions. The evidentiary foundation rests on the exchange's institutional character: regulated, continuous, and broadly relied upon by the public.
**Historical sources are incomplete on modern market structures.** Nineteenth-century legal dictionaries — including Bouvier's — treat exchange price quotations primarily in the context of stock exchanges and commodity markets as they existed before electronic trading, consolidated tape systems, and modern securities regulation. Researchers using historical sources should not assume that the evidentiary rules or commercial conventions described there map cleanly onto modern over-the-counter markets, electronic communication networks (ECNs), or cryptocurrency exchanges, which lack the same institutional infrastructure that courts historically relied upon when admitting quotations.
**Valuation disputes.** In corporate law contexts — appraisal actions, going-private transactions, squeeze-outs — exchange quotations are frequently offered as evidence of fair value. Courts have varied in the weight they assign to market prices versus discounted cash flow or other valuation methodologies. Researchers tracing this doctrine should note that the legal significance of an exchange quotation in a valuation proceeding is contested terrain, not settled law.
**Commodity and futures markets.** Price quotations from commodity exchanges carry additional regulatory significance under modern futures trading law. Historical sources predate the Commodity Exchange Act and the regulatory framework administered by the CFTC; researchers should treat historical dictionary treatments as foundational background only.
**Jurisdictional trap.** The admissibility rules governing market quotations differ between federal and state courts, and between common law jurisdictions. Some states have codified market reports exceptions that explicitly cover exchange quotations; others rely on judicial common law development. This affects litigation strategy and source selection.
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Historical Dictionary Support
Bouvier's Law Dictionary addresses the broader subject of exchanges and exchange records, but its entry material most directly relevant to this term appears in the context of evidence and commercial instruments rather than as a standalone definition. Bouvier treats exchange quotations as a recognized species of commercial record — reliable by virtue of the institutional context in which they are generated and broadly relied upon in trade — and reflects the nineteenth-century common law position that such records were admissible to show market value without requiring the testimony of every individual involved in their compilation.
The historical dictionary record is thin on this specific term as a standalone entry. This is partly a function of how legal dictionaries of the period were organized: price quotations were treated as an evidentiary sub-topic within entries on exchanges, evidence of value, or mercantile custom rather than as an independent doctrinal category. Researchers relying solely on historical dictionary sources will find the treatment incomplete, particularly with respect to the formal hearsay exception framework that later common law and evidence codes developed to address these records.
What historical sources do capture well is the foundational premise: that exchange quotations derive their legal authority from the regulated, public, and continuous character of the exchange, not merely from the accuracy of any individual price report. That premise remains the doctrinal core of modern admissibility treatment.
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Jurisdictional Note
Under the Federal Rules of Evidence, market quotations and similar commercial publications are recognized as an exception to the hearsay rule (Fed. R. Evid. 803(17)), covering published compilations generally relied upon by the public or by persons in particular occupations. State evidence codes vary; some track the federal rule closely, others have independent codifications or continue to develop the doctrine at common law. In securities and commodities contexts, federal regulatory law substantially governs what constitutes an official quotation and under what conditions it may be relied upon.
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Encyclopedia Cross-Reference
See Law Mind Encyclopedia — Securities Markets; Evidence of Market Value; Hearsay Exceptions in Commercial Litigation
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