How To Write A Letter Of Agreement 2022 (With Samples)

Last Updated on August 2, 2022

Letter Of Agreement

Writing an agreement letter is important in stipulating specific detailed transactions. Before embarking on any project, contract, business, job, or task, the terms, and conditions are applied to a working relationship between two or more individuals or parties, and an agreement is initiated. An agreement letter is a legal binding between two or more parties that brings about a mutual understanding of the rudiments of whatsoever work, project, or business you want to embark on. Proper knowledge is necessary as it helps parties involved to decide the legal consequences or implications of the agreement.

What is a letter of Agreement?

An agreement letter is a business document that explains the terms and conditions of a business working relationship between two or more parties. It helps explains the working terms of any business project or contract involving more than one entity or organization. It includes details such as names and contact of parties involved, payment scheme, and timeline agreed upon. Common examples of agreement letters include; tenancy, car rental, payment, employment, contract, etc. Each agreement letter contains different information depending on the need, situation, and purpose.

When do we write the Agreement letter?

Agreement letters are written based on the need and situation which may include the following;

  • Business transactions
  • Business relationship or partnership.
  • Loan
  • Tenancy or Accommodation.
  • Car rental.

How to write an Agreement letter?

In writing an agreement letter the use of professional language is to be employed. It also includes the writing of all terms and conditions agreed upon. Here are steps in writing an agreement letter:

Title the Document: Ensure you add a title to your letter, this helps to specify what the letter is meant for. You can say “letter of Agreement”. It might also be useful to add one or more specific details, like names of individuals or parties involve or the general topic of the agreement letter to be agreed upon when writing any letter of agreement as it helps to sort and identify which is which and what it’s meant for.

  • Listing your personal information: Below the title is where you input your personal information, which includes; your name, physical address, city, state, and zip code.
  • Date: Below is your personal information input the current date on which you wrote the letter.
  • Address the Recipient: This involves the salutation of the recipient after the recipient’s personal information. Words like “dear” can be used as salutations, followed by the recipient’s name. Eg Dear Thompson, “Dear Ms. Bako,” is appropriate for salutation.
  • Introductory Paragraph: This involves an introduction that explains the purpose of the letter and addresses all parties involved. It has to be brief and specific so as to get the reader’s attention.
  • Body: The body of the letter is where you explain in more detail the agreement. A letter of agreement is typically a page long but can be longer to include all necessary details of the agreement. Also using a bulleted list is acceptable to clearly define each term of the agreement. The following information is included in the body:
  • Service: This gives information about the duties and responsibilities of both parties involved, that they promised to do as part of the agreement.
  • Fees and additional costs: The compensation involved in the agreement is explained here. Also, other additional terms of compensation aside from the basic payment plan are stated here as well.
  • Timeline: This gives information about the duration of the agreement i.e. the start and deadline of the agreement agreed upon by the parties involved.
  • Terms of payment: This describes how payments are made or the method of payment, period of payment, and how much is to be paid. Payment could be at weekly, monthly, or yearly intervals depending on the agreement.
  • Conclusion: In conclusion, you can mention other details you forgot to address or include. It should be brief.
  • Closing: End the letter with a sincere but professional closing phrase. Eg “Regards”, “Sincerely”, “Respectfully”.
  • Sign the letter: This contains the names, signatures, and the date they signed off everyone involved in the agreement.

Why do we write an Agreement letter?

The importance of an agreement letter is:

  • To prevent a dispute or any form of misunderstanding.
  • It serves as a means of protecting the legal rights of the parties involved.
  • It helps to take responsibility and be accountable for completing their duties.
  • It helps to prevent confusion or additional negotiation in the future.
  • It explains the consequences or implications, penalties, or fines that would be incurred if the agreement is bridged.

Samples of Agreement letter.

Letter of Agreement

Rahman kolawole

16b Ikpa lane, off Ikpa Road

Uyo, Akwa Ibom, State.

30 July 2022.

Victor Bassey

Managing Director

Bassey’s wears

64 Abak Road

Uyo, Akwa Ibom state.

Dear Victor Bassey,

A formal agreement of the partnership between Bassey’s wears and Rahman’s footies. This agreement recognizes that Rahman Kolawole is to provide professional expertise on behalf of Rahman’s footies throughout the project with Bassey’s wears.

Per the agreement, Rahman Kolawole will perform the following tasks from the start of the project on 25th November 2022 to the end of the project on 25th November 2023:

  • Good and quality clothing and accessories.
  • Complete all financial paperwork accurately and promptly to ensure no policy violation or breaching has occurred.
  • Carry out research and ask questions to clients to determine their current and future clothing needs.
  • Make and strengthen relationships between customers and Bassey’s wears
  • Actively pursue and ensure to maintain new customers.

In accordance with the agreed arrangements, Rahman Kolawole is to be compensated by Bassey’s wears in the amount of 10 million naira. Rahman kolawole is to be paid in full via direct deposit for the completion of their provided services on the project end date. Any additional compensation for an extension of Rahman kolawole services shall be determined at that time, should such circumstances arise.

Please sign and date on the space provided below to signify that you agree to the terms of this letter. Please return one copy to the address above and save the other copy for your records.


Rahman Kolawole.

30th July 2022

Victor Bassey

30th July 2022


Since an agreement comes in diverse forms (written or oral)and serves a different purpose for various reasons, depending on the need or situation prompting it, it is important that business owners understand the scope, terms, and conditions of any agreement before involving into it.

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