What Is An Agreement Letter

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Although oral agreements can be binding and enforceable1, they are not recommended because they leave the important possibility that the parties will later agree on their respective interpretations of the agreement or whether an agreement has been reached. At the risk of saying the obvious – for construction professionals, it always makes sense to conclude their agreements in writing before the start of the work. There are a variety of reasons why the parties may enter into a letter of agreement before performing a formal contract. First, the parties may not be able to agree on all the risk-sharing terms of a formal contract in a timely manner so that an owner can meet a deadline set by their lender, zoning authority, local ordinance, or any other consideration beyond their control. In these cases, the parties may want to move forward with some preparatory work with a letter of agreement, as they can only agree on the price for an initial phase of the project. 4 Doll v. Grand Union Co., 925 F.2d 1363, 1367 (11. Cir…