Guide on Drafting a Commitment Letter

A commitment letter serves as a written agreement detailing terms between two parties. Typically, a contractor will draft a commitment letter upon being contracted for a project. This document holds legal weight as it represents a business arrangement. It's crucial to clearly articulate agreed-upon terms, including project description, costs, additional conditions, and termination clauses. Ensure the letter follows a business format, sign it, and dispatch it.

Include all relevant dates and financial arrangements agreed upon with the other party. For instance, if you're contracted at a rate of $23/hour for 40 hours/week starting August 15, 2019, for a duration of 6 weeks, clearly specify these terms. Additionally, ensure to cover any agreements regarding incidental expenses, transportation costs, or other potential fees related to the project.

• You can also detail other agreed-upon terms, such as the provision of necessary supplies, vacation or sick leave, and insurance coverage.
• State costs exactly as agreed by both parties. For instance, if an hourly rate was quoted, maintain consistency with that rate without switching to a daily rate.

Outline the expected project outcomes. Briefly enumerate the primary responsibilities you've undertaken in exchange for compensation. Describe the scope and anticipated results of the contracted project.

• Ensure that none of the outcomes are unexpected to the recipient.
• For example, if hired to paint a house, specify, 'I will be tasked with painting both the interior and exterior of the house in the agreed-upon colors within the specified timeframe.'

Enumerate any conditions for terminating the agreement. Both parties should have the right to terminate the agreement. Outline any pre-discussed conditions that may lead to the premature termination of the project.

• These conditions may include unforeseen expenses, unreasonable delays, or violations of the specified terms by either party.
• If your contracting firm adheres to a code of conduct, you can simply reference it as grounds for termination. For instance, state, 'I acknowledge that termination may occur in the event of a violation of the code of conduct.'

Maintain a formal tone consistently throughout the letter. Even if you have a close relationship with the recipient, address them using their full name and title. Avoid informal greetings or phrases.

• Immediately after the salutation, delve into the specifics of the agreement. For instance, 'To Mr. John Smith, This letter serves to confirm my engagement for the x project commencing August 15, 2019.'

Keep it concise, limiting it to 1-2 paragraphs. A letter of undertaking should simply reaffirm previously agreed-upon terms with the other party. Therefore, maintain brevity and clarity in the content. The recipient should already be familiar with the terms; your aim is to document them.

• For certain letters of undertaking, a few sentences may suffice to cover the terms.

Avoid technical jargon and opt for plain language. A letter of undertaking doesn't need to resemble a formal contract. Thus, there's no requirement to delve into intricate technicalities or employ complex terminology.

• Utilize clear and straightforward language accessible to all readers.

Opt for Arial or Times New Roman in 11- or 12-point font size. To ensure clarity and readability, adhere to a standard font and size for your LOU. Given its professional nature, adhere to conventional business letter formatting.

• In most scenarios, Times New Roman is preferable, being the standard font for business correspondence.

Position the sender's contact details at the top left corner of the page. If you're sending an LOU on your own behalf, provide your own address, including your name, street address, city, and zip code. If it's on behalf of your contracting business, include the business address in this section.

Date the letter just below the sender's information. Leave a gap between the sender's contact details and the date. The date should reflect the day you finalized writing the letter.

• Adhere to the date/month/year format, for instance, 15 August 2019.

Direct the letter to the recipient beneath the date. Leave a space after the date and then provide the recipient's full name and address. Leave another space and proceed with the salutation. The common salutation is 'Dear,' followed by the recipient's full name.

• If you're aware of the person's name and title, include it in full, e.g., Dear Mr. John Smith.
• If you're unsure about the recipient's identity, use 'To whom it may concern' or the office name you're addressing, e.g., 'To the Office of Student Affairs.'

Conclude with a closing and type your name below your signature. Usual closings include 'Sincerely,' 'Best regards,' or 'Thank you.' Leave four spaces below the closing, then type your full name and title. Print and sign your name with a blue or black ink pen.

• While digital signatures might seem convenient, it's advisable to physically sign, given that a Letter of Undertaking is a legally-binding business agreement.

Review your letter before dispatching. As a letter of undertaking is a business document, ensure its utmost professionalism by proofreading for any spelling or grammar errors. Confirm that all crucial information is included and that the letter adheres to the business letter format.

• After proofreading and ensuring accuracy, proceed with signing it in good faith.