What is a Letter of Agreement (LoA)?
A Letter of Agreement (LoA) is a shorter document (about 6-8 pages) generally used for lower value professional services work (such as work worth less than £25,000).
Though simple, it’s still a legally binding document that outlines the terms and conditions of a business relationship between two parties. As a formal agreement it should include (although not limited to) the key obligations and responsibilities of each party, the broad scope of work, the provisions on the duration and rights of termination of the LoA, the liability position of the parties, the payment terms and any confidentiality and intellectual property terms.
An LoA, when combined with a Statement of Work (SOW), is a great way to get the ball rolling quicker on projects that pose less risk but still require legal protection.
Is a Letter of Agreement the same as a contract?
Yes. A Letter of Agreement is a legally binding document and is a form of contract.
LoAs tend to be short, with less provisions and clauses than a typical contract.
With less detail than a huge 50+ page contract, parties could be more exposed to risk when using a Letter of Agreement. We recommend using them for business deals with less value (such as £25,000 or less).
Is a handwritten letter legally binding?
There’s no legal difference between typed and handwritten agreements. Both can be enforced.
A handwritten contract can be as valid as one that's typed or electronic. We would, however, encourage you to use a typed agreement to avoid any issues with the handwriting not being legible.