Letter of agreement

Letter of agreement
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The letter of agreement stands for a list of services, goods or place which are delivered at settled time, conditions and price. If both sides will sign the contract it becomes legally valid.

2 types of agreement[edit]

Partnership agreements divide into 2 types which can be made. These are non-binding letters of agreement or legal contracts. In general, the letter of agreement is an easier instrument and should be applied if possible. The letter of the agreement does not need the help of a lawyer to create it and is not risky for a partner [1].

In case when partnership entails [2]:

  • a considerable amount of money
  • employees working for both sides or other human resources issues
  • licensing agreements for electronic devices
  • or when one company is a subcontractor for another

a legally binding contract shall be taken into consideration.

Sometimes between larger companies that deal with a great number of partners and initiatives, it is desirable to include some issues in the legal contract. On the other side, however, some situations may be included in the letter of agreement.

The letter of agreement in a marriage (example)[edit]

Probably the most significant factor in a prosperous partnership program is the record of each engagement or marriage with an official letter of agreement. To broaden the marriage metaphor, the letter of agreement, in the partnership manner, is equal to the marital contract. It describes the demands of both sides, and whereas it will not involve critical situations during a divorce. However, it attempts to evaluate responsibilities and roles and takes care of financial problems, as well. The letter of agreement is a chance for both partners to clarify the what, when, who, why and where of the relationship. It gives the base for the partnership and produces a communication tool that will be effective in the judgment of the partnership [3].

Structure of a letter of agreement[edit]

All letters of the agreement have a similar structure. There are some parts that every letter should have. The list below includes all factors that are crucial to entail in the partnership agreement, listed in the way that is most correct. It is clear that each organization has its own shape of the letter which will encompass all the most vital elements.

Example list goes elements which should be in the letter of agreement[4]:

  • Recognition of the partnering companies
  • Date of the agreement
  • Warning notice
  • Mission matching
  • Statement of goals


  1. (M.J.Ball, C.Weaver, J.Kiel, D.W.Simborg, J.V.Douglas, J.W.Albright 2013)
  2. (S.Angley, E.Horsey, D.Roberts 2002)
  3. (J.H.Crowther, J.L.Crowther, B.Trott 2004)
  4. (R.Strauss, P.Hogan 2013)


Author: Magdalena Stachowicz