Contract Glossary
Letter Agreement
Definition
A binding contract formatted as a business letter rather than a traditional legal document. One party writes a letter outlining the terms, and the other party signs it to indicate acceptance. Despite the informal format, a properly drafted letter agreement is just as legally enforceable as a multi-page contract, it simply strips away the legalese and gets to the point.
In Practice
A freelance photographer agrees to shoot a company's product catalog. Instead of a 15-page services agreement, the company sends a one-page letter: 'Dear [Photographer], this confirms our agreement for you to photograph 50 products at our studio on April 15-17, 2026. We'll pay $5,000 upon delivery of edited files. You retain copyright but grant us unlimited commercial use. Please sign below to confirm.' The photographer signs and returns it. Done, binding contract, no lawyer needed for a straightforward engagement.
Example Clause
Dear [Party B], This letter confirms the agreement between [Party A] and [Party B] regarding [subject]. The terms of our agreement are as follows: [terms]. If the foregoing accurately reflects our mutual understanding, please indicate your acceptance by signing in the space provided below and returning a copy to the undersigned. This letter agreement shall be binding upon execution by both parties.
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