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A letter of agreement is a short, signed letter that states the terms of a deal in plain words: who, what, how much, and by when. Mailed with proof of delivery, it creates a dated record both sides hold, and it works best for simple deals where a full contract would be overkill. This is general information, not legal advice.
A letter of intent says the parties plan to make a deal, and it is often deliberately non-binding. A letter of agreement is the deal itself, written in letter form: it states the terms, both sides sign it, and it is meant to bind them. A full contract covers the same ground with more clauses, definitions, and contingencies, which is why lawyers draft contracts for large or risky deals. For a freelance job, a loan between family members, a short rental of equipment, or a small service arrangement, a letter of agreement often covers everything that actually matters, in two pages instead of twenty.
The practical difference shows up when something goes wrong. A letter of intent rarely helps you enforce anything, because it usually says it is not binding. A signed letter of agreement, mailed with a delivery record, gives a court or mediator a clear document: the terms, the signatures, and the date the other side received it. That is also why sending it by mail, rather than by email alone, still has a place: the delivery record proves receipt in a way an email read receipt never quite does.
Cover the essentials and skip the rest. Every term below earns its place, and every term you leave vague becomes an argument later. Write amounts in both words and figures where money is involved, and name exact dates rather than relative ones like "next month."
| Term | What to state | Example |
|---|---|---|
| Parties | Full legal names and addresses of everyone bound | Jane Lee of Toronto and Mark Chen of Ottawa |
| Subject | Exactly what is being done, sold, or lent | Design of a company logo, two rounds of revisions included |
| Price and payment | Amount, method, and due dates | Half on signing, half on delivery, by bank transfer |
| Timeline | Start date, delivery date, and any milestones | Work starts November 9, delivery by December 1 |
| What happens if it fails | Cancellation terms and what each side keeps or returns | Deposit returned in full if delivery is more than two weeks late |
| Signatures and date | Both sides sign and date the same version | Two signed copies, one held by each side |
Draft the letter, then send it to the other party for signature. The cleanest method is to mail two copies with a short cover note asking the other side to sign both, return one, and keep one. Send it by Certified Mail in the US or Registered Mail in Canada so you hold proof of the mailing date and delivery. When the signed copy comes back, file it with your copy, the mailing receipt, and the delivery record in one place. If you mail through LetterAgent, note one limit: LetterAgent prints and mails the letter you describe, but it cannot collect a signature from the recipient, so the return half of the exchange still needs the other side to mail a copy back to you.
Use a lawyer-drafted contract when the amount is large, the work carries real risk (construction, medical, financial advice), the deal involves intellectual property you want to protect carefully, or the arrangement will last a long time with many changing terms. A letter of agreement is a tool for simple, short, low-risk deals. Stretching it over a complex deal saves drafting cost up front and can cost far more in a dispute, because the missing clauses are exactly the ones a dispute turns on.
Ready to mail it? Send your letter with LetterAgent: describe it to your AI assistant, approve the exact quoted price, and it is printed and mailed.
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