![]() What Is a Memorandum of Understanding (MOU)?Īn MOU also spells out an agreement much the same as a letter, and it can be used in the same types of situations. You can also find templates for letter agreements and MOUs online. A signature block preceded by the words, "My signature indicates that I acknowledge and agree to the terms described above".A description of the agreement in the body of the letter, including all the terms you've agreed upon, and.Using the example above, a letter agreement might include: How to Draft a Letter AgreementĪ letter agreement can be as long or as short as necessary to cover the points you wish to include, but you should describe the terms as completely and clearly as possible. Putting those verbal agreements in writing with a letter agreement can help you avoid misunderstandings and protect your interests if a time comes when one (or both of you) feels the other is treating the arrangement improperly. So, if you and your brother-in-law decide to buy a boat together, you might verbally discuss how you'll split the cost, the days you'll each use it, how you'll handle repairs and pay for maintaining it, how to handle matters if one of you wants to sell, and other terms and situations that might arise. The terms you should include in either document are similar. Parties typically use letter agreements when they want to memorialize their agreement and don't want to spend the time and expense consulting with an attorney or when they just feel better using a presentation that's less imposing than a memorandum. But the essential question for each format-will it be upheld as binding if challenged and examined by a judge-is the same. The lawyer's version is likely to have a bunch of legalese ("Whereas so-and-so wishes to…"), use paragraphs identified by Roman numerals, include a bunch of clauses (paragraphs) that are mostly inessential, and be 17 pages long. As long as the letter describes the deal's essential terms, a statement of binding intent, and the parties' signatures, it's as legally sound and enforceable as a document produced by a lawyer's office. The agreement is structured as if it were a letter, with separate paragraphs, a date line, and places at the bottom for signatures. What Is a Letter Agreement?Ī letter agreement, also called a letter of agreement, or an agreement letter, documents an agreement between two or more parties. ![]() The biggest difference between a letter agreement and a memorandum is the way they are structured. Remember that old adage, "Get it in writing"? Oral agreements are enforceable in certain circumstances, but when it comes to some business arrangements-like partnering with your brother-in-law to buy a boat, or buying a big-ticket item you can't immediately take home-a letter agreement or memorandum of understanding (MOU) will do a better job of protecting your interests.īoth documents can be legally binding if they include the essential terms of the agreement, including the parties' intention that they be bound by these terms, and everyone involved signs the document. The Internet is not necessarily secure and emails sent through this site could be intercepted or read by third parties. The lawyer or law firm you are contacting is not required to, and may choose not to, accept you as a client. ![]() Any information sent through this site does not create an attorney-client relationship and may not be treated as privileged or confidential. You should not send any sensitive or confidential information through this site. Your number will be held in accordance with our Privacy Policy. You will receive up to 2 messages per week from Martindale-Nolo. Attorneys have the option, but are not required, to send text messages to you. ![]() You are not required to provide consent as a condition of service. Messages may be sent using pre-recorded messages, auto-dialer or other automated technology. Martindale-Nolo and up to 5 participating attorneys may contact you on the number you provided for marketing purposes, discuss available services, etc. By clicking "Find a Lawyer", you agree to the Martindale-Nolo Texting Terms.
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