An agreement is a mutual understanding between two persons or two companies planning to work together towards accomplishing a specific goal. Such a kind of communication on paper is called an agreement letter. The letter talks about the arrangements necessary to begin and finish the work. It also states the penalties and fines for both the involved parties, in case they violate any rules. It can be made for various reasons like lease, subcontract, lending money, mortgaging, working, buying any product on loan and so on. In order to make it legal, it must be signed by both the parties and each of them must keep the signed copy with them for reference. The letter must address the person whose sign is necessary to form an agreement.
Mr. Smith K Jones
February 12, 2014
Subject: Letter of agreement for supplying electrical goods.
Dear Mr. Gerard,
We are happy to know that you have selected Daimler Enterprises Pvt. Ltd. as the sole vendor for supplying electrical goods to your head office and three branches in the state. We will be providing you the necessary supplies manufactured at our production unit.
According to the discussion we had at your office, we will send our personnel to do the installing and servicing work as required. In case, there is any need to repair or replace the item, allow us 24 hours time to do so. We also agreed that the required time may go beyond this if the replacing parts are not available. The charges for replacement would be extra, and it would be based on the price prevailing at the time of replacement.
We will be billing you for new purchases at the end of the month in which the work is done. The payment should reach us in 30 days from the date of billing. For delayed payment, there would be an additional charge of $100 per day.
If the terms and conditions are acceptable to you, please sign and send a copy of this letter at our official address.
Smith K Jones
Agreed and Accepted
By: _____________________ Date:___________