A counter letter is a legally binding document used to supplement master contracts by detailing rights and responsibilities not included in the main agreement. It can address concerns not covered in the original contract and is often used to create policies relevant to those concerns. An example is the indemnity letter, which outlines remedies if the terms of the main contract are not met.
A counter letter is a legally binding type of document that is sometimes used to augment the terms and provisions found in some types of master contracts. Sometimes referred to as a secondary or supplemental agreement, the back cover details rights and responsibilities that were not included in the main agreement for some reason. When properly drafted and enacted, the letter becomes part of the overall contractual commitment that exists between the two parties and works in conjunction with the master contract to govern their business relationship.
There are several reasons why an eminent charter is advantageous as a subsidiary contract to a contract that is already in effect. During the course of the employment relationship, a buyer may want to fix the price for goods or services that were not offered in the original contract. Changes in commercial laws may also require the buyer and seller to resolve some specific issue that is not adequately covered in the master contract. A back letter can simply address some concern that neither party was aware of at the time the main contract was drafted, and rather than amending the existing contract, this format can be used to create a policy relevant to that concern.
One of the most common examples of a back letter is the indemnity letter. This type of document usually provides a clear outline of what kind of remedies one party will make to the other if the terms of the main contract are not met. For example, if the buyer fails to purchase goods and services that meet the minimum volume quantity identified in the master contract as necessary to secure discounted prices, the indemnity letter may allow the seller to invoice the buyer for the difference between what was actually purchased and the value of the purchase covenant in the contract.
Normally, a contrary letter is not used to reverse or change any of the provisions of the master or main contract. In most cases, the terms and provisions of the letter will address issues that were not specified in that contract for some reason. As a simple resource that allows buyers and sellers to refine their relationships to their mutual benefit, the letter offers a quick and easy solution for dealing with anything not covered in the original contract without the need to rework the pre-existing contract.
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