Letter of agreement

Letter of Agreement

A Letter of Agreement is a legal document that confirms the acceptance of the terms proposed by the supplier by the buyer. It binds both parties to the terms specified in the document and serves as a formal agreement between them. The Letter of Agreement may also be referred to as an LOA, Letter of Intent, or Memorandum of Understanding.

The purpose of the Letter of Agreement is to establish clear expectations and responsibilities for both parties involved in a business transaction. It clarifies the terms of payment, delivery, quality, warranties, and any other specifics related to the purchase. It can also outline the consequences of breach of contract.

The Letter of Agreement is typically initiated by the supplier and then reviewed and signed by the buyer to signify their acceptance of the terms. It may include a signature line for both parties, witnesses, or a notary.

Overall, the Letter of Agreement is an important tool for managing business relationships and avoiding misunderstandings. It creates a legally binding agreement that protects the interests of both parties involved in the transaction.