Letter agreement
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FAQ
The terms agreement and contract are used interchangeably, but legally speaking, they are two different things. An agreement is simply an understanding or arrangement between two or more parties. A contract is a specific agreement with terms and conditions that are enforceable court.
The main difference between an MOU and an LOI is the number of the signatories. In an MOU, more than two parties may be involved but for an LOI only two parties are involved.An MOU or an LOI is executed for the purpose of declaring that the various parties involved are negotiating a contract.
Begin your letter by clearly indicating the parties involved in the agreement. Clearly state the reason for your agreement in your first paragraph giving description of all details such as stake holder ratio, payment period etc.
Once all parties sign a letter of agreement, it becomes a binding legal document. You should include a signature block at the end with room for both signatures and dates with the heading "Acknowledged and Agreed." Both parties should keep a final, signed copy for their records.