Legal Guides

What Is A Letter Of Agreement?

17 June, 2023


No Comments »

A letter of agreement is a written legal document that is made between two parties. 

Letters of agreement are primarily made by parties to simply make an agreement based on their discussions. 

A letter of agreement is considered to be binding by law and can be written by anyone. 

There might be some verbal agreements that could be upheld in a court of law if a dispute arises. But it is advisable that it is the safest way to have an arrangement that is in writing. 

This is because written agreements have a better chance of being proofed in a court of law rather than putting unvalidated claims. 

Additionally, a letter of protection will provide you with a guarantee that the terms of your transaction or promised services will be enforceable. 

A letter of agreement is considered to be nothing less than a contract that is between two parties. 

This document becomes enforceable by law through the attainment of signatures of the parties or by exchanging letters between the two parties. 


Letter Of Agreement Vs Contract: Difference

A letter of agreement is considered as a preamble to a contract. 

This means ‘meeting of the minds’ is the primary factor within an agreement. It is also vital for a contract. 

Both a letter of agreement and a contract are considered to have the parties entering to be on the same page. This means neither of the parties should be in a disagreement regarding the terms included in the document. 

One of the major differences between a letter of agreement and a contract is its legal enforceability. 

Contracts are considered to be legally enforceable promises that the parties are required to perform. 

On the other hand, some agreements, like clickwrap agreements, are recognized to be legally enforceable but require certain legal jargon. This is applied to the parties intending to enter a binding agreement. 

hat Is The Purpose Of The Letter Of Agreement?

A letter of agreement is generally used when you are willing to enter into a simple agreement that will be legally enforceable. 

A letter of agreement might be correct for you if you are not willing to include complicated terms and words within your document, like a contract. 

Moreover, a letter of agreement can come in handy for you when you do not have the means of drafting a contract. 

Moreover, this kind of agreement is recognized to be very simple as you are required to ensure that three factors are included in the document. These include an offer, a consideration, and an acceptance. 

It is advised to include these three factors with the letter of agreement if you want to ensure it is enforceable from a legal standpoint. And it will also ensure if either of the party in the agreement has wronged, there will be legal consequences

Letters of agreement are especially used for the purpose of people who owe debt and do not want to go into bankruptcy. 

If you are in debt and do not have the amount to effectively pay the debt, then a letter of agreement is right for you.

You can use the letter of agreement to lessen your debt amount and effectively settle your debt amount with the person you have debted with. 

Who Writes A Letter Of Agreement?

A letter of agreement is usually considered a legally binding document that is enforceable by a court of law. 

A letter of agreement does not necessarily includes complex legal words or terminologies. It can easily be written by anyone, even if you do not have expert legal knowledge. 

But, if you are unsure of the facts that you will include within your letter of agreement, then you can have a consultation with a contract lawyer. 

Consulting with a contract lawyer will ensure that you include all the necessary factors that will make the letter of agreement legally enforceable. 

So, you can easily hire an experienced and professional contract attorney to assist you in writing a letter of agreement. 

Final Thoughts 

Now you have a better idea regarding what a letter of agreement exactly is.

If you are seeking to develop a non-complicated agreement but also need to include the legal components for making it legally binding, then a letter of agreement is perfect for you. 

A letter of agreement would save you from the hassles of a complex contract. This is because developing a contract might be useful in situations that require a long list of terms and conditions that are required to be followed to make an agreement enforceable by law. 

On the other hand, a letter of agreement usually does not have complex terms and conditions to become enforceable. This can be useful when you are making simple agreements with another person. 

So, if you are facing trouble in writing a letter of agreement, you can seek help from a contract lawyer to make an effective letter of agreement as per your needs. 

Share This Article

Jyoti Jha is a freelance SEO content writer for tech , health, and education-related content. With 5 years of experience in the industry, I am creating high-quality content that captivates readers and delivers value.

View Post

Leave a Reply

Your email address will not be published. Required fields are marked *


Civil Attorney
Medical Negligence Solicitors