If you enter business contracts, you must ensure that the terms of your arrangement are clear and unambiguous. Within most business deals, the legally binding contract is the main document. However, your company can use other documents to clarify or amend the binding contract. One such example is known as a side letter. This article will explain the primary uses of a side letter, so your business can determine whether it is necessary within your commercial contract arrangements. <\/p>\n\n\n\n
The purpose of a side letter is to clarify the main contract terms. As such, most side letters will simply add a layer of detail to the contract rather than overturn it. Some lawyers compare a side letter to the commentary in a sporting match. You watch the game for the images, but the commentary adds detail to what you see. Similarly, most side letters act to describe the parties’ intentions and clarify specific points of the written agreement.<\/p>\n\n\n\n
Companies can sometimes dispute whether the contents of a side letter are legally binding or not. While side letters can occasionally be legally binding, they are primarily used to handle more administrative matters. Usually, the contract will contain all critical terms.<\/p>\n\n\n\n
A side letter is a helpful way of adding additional information to a written agreement. They can record any last-minute clarifications between your company and the other party to the legally enforceable contract<\/a>.<\/p>\n\n\n\n Let us look at a quick example. Suppose your business provides catering services to other companies. The commercial contract records: <\/p>\n\n\n\n However, it would be helpful for your organisation to know more details such as where, when and how the arrangement should take place. This is where a side letter can be beneficial. In this instance, it could clarify additional details such as where and when to deliver the food. <\/p>\n\n\n\n Furthermore, it could vary any vague terms of the original contract. For example, the contract may simply state \u2018the provision of healthy lunches\u2019, which is unclear. A side letter could clarify the exact requirements of the club with suggested lunch menus and ingredients they wish to receive.\u00a0Additionally, the letter may build trust and goodwill between the parties. For example, it could record that the arrangement’s primary purpose is to ensure the client’s excellent health.\u00a0<\/p>\n\n\n\n Moreover, the letter can record any last-minute changes to the deal. This is unusual, and in reality, you should only use a side letter to record minor changes<\/a>. If, for example, you signed a primary contract<\/a> to supply goods to a business every Wednesday, but the parties wished to change the delivery date to Tuesday, you could use a side letter to do so. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nExample<\/h3>\n\n\n\n