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What is a Letter of Agreement?

A Letter of Agreement sets out the terms of a working relationship by including information such as the contact information of both parties, the agreed-upon terms, including payment, when the agreement goes into effect, and when it will end. Outlining the terms of your arrangement through a Letter of Agreement will help you protect your legal rights and know your responsibilities.

When to use a Letter of Agreement:

  • You are ready to enter into an agreement and you want to define the terms and conditions of the agreement.

Sample Letter of Agreement

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Dear :


This letter (the "Agreement") summarizes my understanding of the agreement that we reached on after our email exchange.telephone conference.meeting. Prior negotiations took place on . If this Agreement is acceptable to you, please sign below in the space designated for your signature.


As I understand it, we have agreed as follows:


1. Agreement

It is my understanding we have agreed to the following in regards to: .




2. Term

The term of this Agreement ("Term") will commence as of , and will continue in effect until , at which point it shall terminate, unless the Term is extended or terminated earlier in a written document signed by both of us in the manner described in Paragraph 5 of this Agreement or as otherwise provided for in this Agreement.


3. Force Majeure

Neither of us will be liable to the other for any loss, damage or default occasioned by strike, civil disorder, governmental decree or regulation, acts of God or any other force majeure (collectively, a "Force Majeure Event"). We agree that upon conclusion of a Force Majeure Event, each of us will use commercially reasonable means to recommence full performance of our obligations under this Agreement.


4. Notice

Any notices to be given under this Agreement by either of us may be effected either by personal delivery in writing or by mail, registered or certified, postage prepaid with return receipt requested to the addresses set forth in this Agreement unless one of us notifies the other, in writing, of a change of address.


5. No Other Agreement

This Letter of Agreement contains the entire agreement between us. No part of this Letter of Agreement may be changed, modified, amended or supplemented except in a written document, signed by both of us which specifically states that the document is being signed for the purposes of modifying this Agreement. Each of us acknowledges and agrees that the other has not made any representations, warranties or agreement of any kind, except as is expressly described in this Agreement.


6. Governing Law

This Agreement shall be interpreted in accordance with the laws of the . In interpreting this contract, we each hereby acknowledge that we have mutually agreed to the terms of this Agreement and thus waive the protections of any law or statute which provides that in the case of uncertainty not removed by the laws relating to the interpretation of the contracts, the language of a contact should be interpreted against the drafter of the contact. Further, we agree that in the event that any one or more of the provisions of this Agreement shall be found to be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein shall not be in any way affected or impaired.


7. Attorney's Fees

We agree that if any action is commenced to enforce any claim, demand, debt, action, cause of action, liability, cost, right, duty or obligation provided herein, or if any action is commenced to enforce any of the provisions of this Agreement, the prevailing party in such an action shall be entitled, in addition to any other remedies, to an award of out-of-pocket attorney's fees, including all actual costs incurred by the prevailing party.


8. Remedy of the Parties

Except as otherwise specifically provided for in this Agreement, in the event one of us is in default or in breach of any of the material provisions of this Agreement and fails to cure the default or breach within ten (10) days after written notice of such default or breach by the other, the non-breaching party shall have the right to terminate this Agreement.


9. Assignment

This Agreement shall only be assignable or transferable by one of us upon the written approval from the other.


10. Relationship of the Parties

It is understood and agreed that this Agreement does not create a partnership, joint venture or employment relationship of any kind between us; that each of us is acting as independent contractors with respect to each other; and that none of the employees of either of us will be deemed to be employees of the other for any purpose. 


11. Termination

Either of us shall have the right, forthwith and without further notice, to terminate this Agreement by written notice to the other, upon the occurrence of any of the following events:


(a) A breach or default of a provision of this Agreement which is not cured within the period set forth in Paragraph 8 of this Agreement;


(b) A Force Majeure Event that continues for a period of thirty (30) days; or


(c) The death or incapacity of either of us during the Term.


In the event of a termination, any moneys due on the date of termination shall be immediately due and payable.


12. Headings

Headings used in this Agreement are provided for convenience only and shall not be used to construe meaning or intent.


If the above correctly expresses your understanding of the terms reached during our negotiations, please sign and date a copy of this Agreement and return the signed and dated Agreement to me.



By:   Date:  




By:   Date:  








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___Sign this document. This document needs to be signed by:




The Letter of Agreement can be signed online. It becomes effective as of the date specified in the Letter.


___Everyone gets a copy. Anyone named in the document should receive a copy of the signed document. If you sign this document online a copy will be securely stored in your account.


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Letter of Agreement FAQs

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  • How do I write a Letter of Agreement?

    Making a Letter of Agreement online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. Consider these questions beforehand to make the process speedier:

    • What issue or matter was the subject of the negotiations?
    • What are the terms the parties have agreed to?
    • When will the agreement become effective?
    • When will this agreement end?

    If you don't have all of the details you need, you can skip questions and save your document for later.

  • What is the difference between a Letter of Agreement and a contract?

    A contract is legally binding while a Letter of Agreement is usually non-binding, unless it is signed by both parties.

  • What are the 4 types of contracts?

    There are numerous types of contracts, but four common types of contracts include:

    • Unilateral contracts - Involve an action undertaken by one person or group alone. In contract law, unilateral contracts allow only one person to make a promise or agreement.
    • Bilateral contracts - Unlike unilateral contracts, bilateral contracts involve promises made by both parties.
    • Express contracts - The terms of an express contract are explicitly set out, whether orally or in writing.
    • Implied contracts - The terms of an implied contract, in contrast to an express contract, come about non-verbally and are inferred from the actions of the other party.

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