Engagement letter

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Mbas

Member
Polish
Hi,
What is the difference between an engagement letter and a contract? Is an engagement letter is a type of contract reserved only for legal acts or is it simply a letter outlinging the most important parts of contract that parties are going to sign?

Thanks in advance
 
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  • PaulQ

    Banned
    UK
    English - England
    I don't know what an "engagement letter" is. Can you describe it?Wikipedia:
    An engagement letter defines the legal relationship (or engagement) between a professional firm (e.g., law, investment banking, consulting, advisory or accountancy firm) and its client(s). This letter states the terms and conditions of the engagement, principally addressing the scope of the engagement and the terms of compensation for the firm.
    There is an example of the terms on the site. It sounds very similar to a contract.
     
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    Cagey

    post mod (English Only / Latin)
    English - US
    Is your question about the difference between an engagement letter and a contract?

    Or is your question the one you give in the second paragraph, about how to write a question with two alternatives?

    (We require that each thread have a single focus, so we need to know which one you would like this thread to discuss.)
     

    PaulQ

    Banned
    UK
    English - England
    As I say, it sounds very similar to a contract, however, instead of being an agreement between two parties, it seems to be a statement by one party that describes what they will do, how they will do it and how much it will all cost. I see no note that the recipient has to agree to everything in the letter: it seems more to be information... I think that it would fall short of a contract.

    see also: http://www.aat.org.uk/about-aat/mip-guidelines-and-regulations/mip/regulation-22-letters-engagement
     

    Cagey

    post mod (English Only / Latin)
    English - US
    We probably need more context to answer your question, as 'engagement letter' or 'letter of engagement' seems to be used in certain types of business relationships but not others. Here is Investopedia.com's definition:

    Definition of 'Engagement Letter'
    A written agreement to perform services in exchange for compensation. Engagement letters are traditionally used by certain professional service firms, particularly in the fields of finance, accounting, law and consulting to define the specifics of the business relationship. Normally, the letter is sent by the service firm to an officer of the engaging company. Once the officer has signed the engagement letter, the letter serves as a contract. Engagement Letter Definition | Investopedia

    In a comment further down the page, they explain that the engagement letter is "more informal" than a contract.
     
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