How to Write A Letter for Signing A Contract

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You will know your business is doing well when the suppliers and other stakeholders will take a positive interest in your company. It is evident that you will need to write contract letters then. This will be the starting point of an official relationship between you and the other party concerned.

What is a Contract Letter?

A contract letter is a letter between two parties that is sent to confirm the early negotiations between them, and a significant document in case there are future disputes. It can be the contract for buying a property, hiring an employee, marker of the distributable, etc. It is a written version of the agreement that both of you have had in acceptance of the terms and conditions in doing business together. 

What to Include in a Contract Letter:

A contract letter will represent your business. As much as it needs to be graceful, it needs to be professional. Since it is the starting point of a probable long-term relationship, it needs to be comprehensive, well-written, and free of loopholes and confusion to avoid future debate.

In case of trading, the company receiving the order thus has to send a contract letter confirming the order and reassuring the points of agreement like supply dates, supply needs, quality, quantity, related costs, exceptions and other specifications, what will happen in terms of delay or provisions if the items are faulty or do not meet the standard, etc.

In case of hiring, the company has to send a contract letter to the employee with necessary details covering his status (full time or part time, non-exempt or exempt), the amount of salary agreed upon, when will the salary be payable, a summary of the important company benefits, the reporting structure, information about probation, job responsibilities, probability of transfers, any other condition that the employee has agreed to work upon, etc.

The steps to Write a Contract Letter:

You will need to follow the following basic format and structure to draft your contract letter. Here I will take you through the contents of a contract letter following a trade agreement:

  • Start with details of your company and follow with details of the person you are writing to. Include posts of both parties of the companies, the company names, the phone numbers, and addresses.
  • Start with a friendly salutation, “Dear…………..”
  • Start simply with why you are writing, in this case, to confirm the agreement and so on. Give details to the contract since you might not be the only one they are supplying to.
  • Let them about their reputation and how you are pleased to work with them and take a turn the topic to your company.
  • Now include the required details: quantity and quality of materials to be received, type, model number, time, date, and other terms and conditions.
  • Close with an invitation to contact if required.
  • End with signature and goodwill.

Tips to Remember:

Don’t forget these while you’re at it:

  • Start with the company letterhead.
  • Avoid mistakes in spelling, grammar, and most importantly, numbers. If you need 696 solar panels do not kindly write 966 or 969. Remember, this is a proof of what you’re telling and what they’ll have to do. Your mistakes might cost you more than what it will cause the other party.
  • Make the other party feel appreciated. This promotes a sweeter relationship in the making.
  • Cover the specifics in a list or in your mind before sitting to write, so that you don’t forget anything.  Don’t sound vague. Cover all the details so that both of you are on the same page and there’s no scope for future complaining or confusion that a particular part of the letter was not clear.
  • In the process of giving information and maintaining details don’t sound very complicated.
  • Remember to sign the letter and date it properly. If you’re writing it on 2nd Jan and mailing it on third, having mentioned in the letter that you need the items with 4 business days, you can easily imagine how much confusion there will be, even if all your product specifications were crystal clear.
  • Ask a legal team to review your letter before sending so that there are no possibilities of exploitations due to loopholes.


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