How to Write an Agreement Paper


An agreement paper, also called a letter of agreement, is a document written in plain language that outlines the terms of an agreement. Agreement paperwork can serve as a legally binding contract if it contains all of the necessary elements. To be considered a valid contract, the agreement paper must contain an offer, consideration, acceptance and mutuality.

Additionally, the agreement paperwork should have the contact information of the parties involved, specify the state whose laws govern the contract, deal with the provisions for terminating the contract and specify how disputes will be handled.

Contract Law Basics

A valid, enforceable contract must have certain elements. An offer must be made. The offer can take the form of a promise to do something or to refrain from doing something. For example, a person might offer to sell their motorcycle, or refrain from competing with an employer should they leave that place of employment.

There must be consideration, meaning something of value has been promised in exchange for what was offered. Consideration could be money, efforts, services or an agreement to also refrain from a specific action. In some instances, the fact that an individual changed their condition due to relying on a promise has been determined to be legal consideration.

A valid contract needs to have clear acceptance. The acceptance may be expressed verbally or through actions taken to perform the contract. Acceptance has to be of the offer as it was made. If the party says "yes, but..." they are likely making a counteroffer. A change of the terms by the second party to the agreement has to be agreed to by the party who made the offer. Sometimes negotiations can involve several counteroffers before acceptance is reached.

Lastly, the contract must show mutuality. This means that it would be clear to a reasonable person that both parties agreed to the same terms and decided to proceed with the contract. When discussing contract law, mutuality might also be called a bilateral agreement or a meeting of the minds. No matter the phrasing, mutuality means that both parties agree to all terms set forth and intend to perform their duties as outlined by the contract.

Written or Oral Contracts

In many cases, an oral agreement can be seen as a contract if all of the elements were present. However, an oral agreement is a risk not worth taking in a business environment. It is much safer to include every element of the business agreement in the written contract.

Any elements that have been left out of the initial written contract should be written as an amendment document to the original contract. A court may refuse to enforce verbal agreement amendments if a written contract has been put in place.

Certain types of contracts are required to be in writing. The Statute of Frauds states that these contract types must be written:

  • Contracts for the sale of land.
  • Contracts for the sale of goods for $500 or more, as outlined by the Uniform Commercial Code.
  • Contracts in consideration of marriage.
  • Contracts that will take longer than one year to perform.
  • Contracts to assume someone else's debts or other obligations.
  • Contracts where the executor of an estate agrees to pay estate debt from personal funds.

Letter of Agreement Format

A letter of agreement format template can help you ensure that you include everything in your agreement paperwork. Your opening paragraph should specify the parties involved in the agreement and the purpose of the agreement. The correct legal name of each party, whether individual or business, should be listed along with the address of each party.

It may be helpful to give each paragraph or section a title to keep the written agreement clear and easy to navigate. Some paragraphs that should be included are:

  • The goods or services expected to be provided.
  • Anything that the buyer needs to do for or provide to the seller in the course of the job.
  • The amount of payment or the amounts and timing of several scheduled payments.
  • Circumstances that can terminate the contract, such as a failure to meet deadlines.
  • A method of dispute resolution.
  • A specification of which state's laws govern the contract, if parties are from different states.
  • A confidentiality agreement, if proprietary information will be exposed during the performance of the contract.
  • A dated signature by both parties to show bilateral agreement.

Letter of Agreement Format Example

Letter of Agreement

This agreement is made on July 1, 2019, by Brooks Accounting Service LLC, the accountant, and Thingy Widget Company Inc., the client. The purpose of this agreement is to outline the scope of accounting services to be provided and the schedule of payments to be made.

Brooks Accounting Service LLC
123 Books Way
Anytown, MS 12345

Thingy Widget Company Inc.
456 Manufacturer's Point
Factoryville, AL 45678


The accountant will provide payroll services for approximately 300 employees and full-charge bookkeeping to the client for the period of one year from this agreement. At the termination of the contract, a review of services provided and payments received will be made and adjustments to billing will occur if necessary before another contract is signed.

The client will timely provide the information necessary to the accountant for the performance of the contract. This includes, but is not limited to, employee pay rates and time clock information, bank statements, sales records, purchase records and other information necessary for the accountant to provide complete and accurate monthly financial statements to the client.


The client will provide timely monthly payments of $1,200 due the first day of each month throughout the course of the contract. A five-day grace period is provided before late charges are assessed. Payments received on or after the sixth day will be subject to a 5% late fee.


The parties agree that Mississippi law will govern this contract in the event of any dispute.


Each party agrees to protect the confidential information received from the other. This includes, but is not limited to, the client's employee personal information, rates of pay for various positions in the company, bank account numbers and other information, vendor names and contact information. This also includes, but is not limited to, the accountant's methods, employee names and information, billing rates and any other proprietary business information related to the performance of the contract.


If either party consistently delivers late work, information or payments, the other party reserves the right to provide a 30-day notice to terminate the contract. The accountant's work will be considered late if, despite having been provided with all necessary information, the statements are not given within 10 days of the receipt of such information. The client's information will be considered late if not provided within seven days of the close of the prior month's business, or within three days of the client's receipt of the information to be provided to the accountant, whichever is later.


Disputes related to this contract will be subject to mediation. The mediator's decision will be considered final. Parties must request, in writing, a review of the circumstances of the dispute. Such request must be faxed to (888)444-1673 or mailed to:

Mediation Pros, Incorporated
789 Resolution Road
Amity, MS 99999

Accountant company representative signature:

Client signature:


About the Author

Laura Chapman holds a Bachelor of Science in accounting and has worked in accounting, bookkeeping and taxation positions since 2012. She has written content for online publication since 2007, with earlier works focusing more in education, craft/hobby, parenting, pets, and cooking. Now she focuses on careers, personal financial matters, small business concerns, accounting and taxation. Laura has worked in a wide variety of industries throughout her working life, including retail sales, logistics, merchandising, food service quick-serve and casual dining, janitorial, and more. This experience has given her a great deal of insight to pull from when writing about business topics.