Reliance letter is an additional letter which can be attached to the reports, send from one party of the agreement to another. Author of the report under some circumstances can, but not always must, attach this letter to the report. This works as a confirmation that the other party can rely on the content of the full report, or rely on the specific part of that report.
Reliance letter is commonly used in construction work, design and engineering projects. That's because in those cases managers, designers and engineers usually create reports. Those reports are formal documents that provide pieces of important information about the processes, stages or more general information, even about entire industry. Creators of those reports wants to get a document from an geotechnical or environmental professional, which allows people or companies interested in a progress of work, to rely on the contents of the report. Reliance letter can also be a contract, but it depends on a few factors: offer, acceptance, remuneration for promises in the letter, intention of parties concerning legal effect of the letter. Most commonly used change this letter into a contract is consideration clause, which indicates both legal and contractual relationship of the parties.
Company A is selling a construction sites to company B. In this case company A can order an estimation of environmental conditions, that company B will rely on later, during making decision about purchase and a price. In this case company A as a creator of that report can attach a reliance letter issued by environmental professional confirming that the purchaser can rely on the contents of the report.
Reliance letters can only be issued by environmental professionals. Specifications of this position are settled by 40 Code of Federal Regulations. According to which: Environmental Professional means: a person who possesses sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding conditions indicative of releases or threatened releases on, at, in, or to a property, sufficient to meet the objectives and performance factors. Person who works as an environmental professional also should be current in the specified field of science or industry by continuing education. To become such a professional person needs to:
- possess current registration or a license from a state, and have relevant working experience of three years or,
- be licensed or certified by the government, or state, for environmental inquiries and also have relevant working experience of three years or,
- possess a higher degree in a discipline of science or engineering and five years of relevant working experience or,
- have more than ten years of relevant working experience.
What should be in the reliance letter
This letter should include:
- A list or description of the reports or report that letter concerns, which needs to be transparent, so that can be easy to verify to which exact report it was made for,
- The reason for the reliance, such as purchase or developing,
- Guaranty that the reasonable skills and care were used by the author during creating the report.
- Guaranty of the environmental investigation.
- Details of the agreement, limiting liability of partaking companies or people,
- Alternative restrictions of liability, such as time period,
- License for the usage,
- Confirmation of insurance coverage,
- Handwritten signature of the environmental professional,
- Handwritten signature of the representative of the company,
- Telsey A. I., (2014), p: 6,
- Feldstein S. G., Fabozz F. J., (2011), p:88-89
- Legal Information Instute, (2019),
- Legal Information Instute, (2019),
- GHD Limited, (2017), TERMS Environmental Services Inc., (2019),
- Feldstein S. G., Fabozz F. J., (2011), The Handbook of Municipal Bonds, J. Wiley & Sohns Inc., p: 79-89,
- GHD Limited, (2017), Reliance Letter., p:1-3,
- Legal Information Institute, (2019), Electronic Code of Federal Regulations., Cornel Law School,
- Telsey A. I., (2014), New Jersey Environmental Law Handbook., Bernan Press, p: 5-7,
- TERMS Environmental Services Inc., (2019), Reliance Letter., p: 1-2,.
Author: Artur Bućko