Letters of appointment (or letters of acceptance, or letter contracts) are sometimes used to appoint consultants in cases when a client wants the consultant to start work quickly, while a full contract is being prepared.
The letter should put a time limit on its validity and make it clear a contract will supersede and replace anything expressed in the letter of appointment.
A scope of work to be undertaken.
The fee (excluding VAT) to be paid within the time period, and when it is to be paid.
The date for the start of work and the period covered by the letter.
The right of the client to use material generated in the time period.
A statement that the letter is an interim arrangement to be substituted by a contract.
A statement that there is no guarantee to extend the appointment beyond the time period stated.
The amount of professional indemnity insurance cover required for the project.
The named staff or sub-consultants who will carry out the commission.
The consultant’s reporting lines within the client organisation.
A statement allowing termination of the agreement at will by either party, but with a fair proportion of the fee to be paid by the client as well as properly incurred and recorded expenses.
A statement confirming that unresolved disputes will be settled by adjudication under English Law.
Letters of appointment may also be appropriate if a consultant is required for a very insubstantial or minor commission where a full-blown contract could be seen as heavy handed and off-putting. This also applies to small side-projects such as commissioning a sculpture from a particular artist. In such circumstances, many of the items listed above should be included in the letter, together with a programme and budget.
The appointment letter should be duplicated for the consultant’s retention and return. It should have an acceptance clause for the consultant’s signature at the end and the consultant should be asked to initial the foot of each page.
NB Contractors are treated slightly differently, using a letter of intent for temporary purposes prior to engrossment and execution of contract documents. See Letter of intent for more information.