A letter of comfort is a commercial device used in the negotiation of contracts. The letter is sent by the parent company, another client of the company on whose behalf the letter is sent, or the government, to persuade the other party that transacting business is a Good Idea™. Typically, the letter will try to indicate that because the sender is on board, the risk is low.

The legal effect of such letters depends entirely upon the drafting, rather than upon any preconceived legal notion of a Letter of Comfort. With careful drafting, they may seem to promise the world, while having no legal validity whatsoever.

Log in or register to write something here or to contact authors.