Letters of agreement are used to clarify working arrangements between two parties:
.a homeowner and a contractor; a consultant and a client; a vendor and a customer; a company department and senior management. When the relationship is customer/ vendor, a signed letter of agreement may serve as a contract between the parties.
We cannot give legal advice regarding contracts or letters of agreement in this book. However, letters of agreement should accomplish several tasks:
• The letter must identify that it is an agreement to do work.
• The project should be named and described.
• It’s also a good idea to thank the customer for choosing you or at least for allowing you to submit the agreement for consideration.
Other important items to include are cost, deadline, schedule, and payment terms. Be detailed and specific. If the agreement is unclear, vague, or ambiguous, it is the vendor, not the client, who is likely to suffer most, although it’s generally bad for both parties.
Close by asking for the go-ahead — the return of the signed letter of agreement with any advance payment required.
Dear Mr. Jones:
Thanks for choosing Satisfaction Ad Agency to handle your job #3333. Job #3333 is a series of three capability brochures. I will write these brochures for you and provide such marketing and editorial consulting services as may be required to implement the project.
My base fee for the services I described above is $10,000. That fee estimate is based on 100 hours of working time at my hourly rate of $100, and includes time for copywriting, editing, teleconferencing, meeting, consulting, travel, and research. Copy revisions are included in my base fee, provided that at such time as the total time devoted by me shall exceed 100 hours, I shall bill you for additional working time at the rate of $100 per hour.
Out-of-pocket expenses, such as toll telephone calls, photocopies and computer printouts, fax charges, messengers, and local and out-of-town travel incurred in connection with the project will be billed to you in an itemized fashion. Payment of the base fee will be made as follows: One-third of the above-mentioned base fee is due upon my commencement of work; one-third upon delivery of first draft copy; and one-third is due upon completion. Payment for expenses will be made within ten days following receipt of invoice.
If you are in agreement, please sign and date this letter on the lines provided below and fax it to me at xxx-xxx-xxxx or mail it to the address on the letterhead.
ACCEPTED AND AGREED
By: ___________________________ Date: ___________________________