Letters of Agreement Jump-Start Contracts


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Organizations often hire contractors. In most cases, negotiating and signing a contract should precede the beginning of work. In some cases, however, the assignment is too small to warrant a full contract. And, in other cases, although a contract is essential, the work is too urgent to delay until the negotiation and approval of a full-scale contract. In these types of circumstances, turn to a Letter of Agreement (LoA) instead.

The Letter of Agreement

What is a Letter of Agreement (LoA)? Also known as a letter of understanding, memorandum of understanding, or a scope of work agreement, an LoA is a brief document that summarizes basic items of agreement between you and a contractor so that work can commence. At a minimum, an LoA will contain information on the nature of the work to be done, due dates, and payment terms. In comparison with a contract, an LoA is much briefer, making it faster and easier to draft, and easier to get approved by both parties.

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