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A letter of agreement is an agreement between two parties that puts the agreement's details in writing to resolve any future issues.

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What is a Letter of Agreement ?

Oral contracts are usually enforceable; however, drafting a letter of agreement increases the contract’s legitimacy. A legitimate letter of agreement is equivalent to a contract.

When Should a Letter of Agreement Be Used?

When you require a legal agreement, for example, templates for regular agreements, including customer contracts, leases, non-compete agreements, and employment agreements, are usually easy to locate online.

In certain circumstances, you’ll need to document an agreement that doesn’t fit into the existing forms. 

This is where a letter of agreement, also known as a memorandum of understanding (MOU), may help. This is the most basic sort of contract, and it consists of an offer, consideration, and acceptance.

How to Write a Letter of Agreement?

A basic agreement on standard letterhead signed by any party can be used as a letter of agreement. The letter is usually written by the person that is making the offer. This also gives you authority over the agreement’s terms, as long as the common understanding is reflected.

An MOU framework, which is written like an ordinary contract, can also be used. You’ll provide the parties’ names, dates, and contact information. Each party will sign and date the paper at the conclusion.

List the major aspects of the agreement in the body of the letter and offer precise, detailed information if available. This should include things for sale, rental space, and services for hire.

An MOU should be as brief as possible, but it should include provisions for jurisdiction, attorney fees and expenses, modifications, choice of law, waiver of jury trial, assignments, notifications, and/or counterparts, among other things.

An agreement letter becomes a legally binding document if all parties sign it. With the header “Acknowledged and Agreed,” include a signature block at the end with room for both signatures and dates. A final, signed copy should be kept by both parties for their records.

Important Terms to be included in a Letter Agreement

The following are key provisions that should be included in any of these agreements to guarantee that everything important is covered:


The object being sold, the property is rented or sold, or the service being offered must be described in such a way that it cannot be mistaken with something else. It should be clear.

Jurisdiction in law

If a disagreement occurs after the agreement has been completely implemented, one or more parties will desire to settle the issue through legal methods. 

Local, state and even federal laws that may apply to the item or service being supplied in return for anything else should be included in the agreement so that the appropriate action may be done quickly.

Fees charged by lawyers

As disagreeable as a legal dispute is, it may be necessary in some situations. Thus the agreement should contain a provision stating who will pay for attorneys if required.


A portion of the agreement should specify whether or whether adjustments can be made at any point during or after the sale or service is completed, and if so, under what terms.


A portion saying that the goods or service will be of a given quality or in a certain condition will boost the buyer’s trust.

Assignments, a choice of law provision, a waiver of jury trial, and counterparts are all things you may want to include in your letter of agreement to strengthen it.