Engagement Letter

An engagement letter is a written agreement sent by a service provider to a client that confirms the scope, terms, and conditions of the engagement. It's less formal than a full contract but more binding than an email. Accountants, lawyers, and consultants commonly use engagement letters; freelancers in other fields use them less often but probably should.

A standard engagement letter includes: description of services, roles and responsibilities, fees and payment terms, timeline, confidentiality obligations, limitation of liability, and termination clause. It's essentially a lightweight contract formatted as a letter.

The main advantage over a full contract: speed and simplicity. For smaller engagements (under ₹2-3L), a 2-page engagement letter gets the job done faster than a 10-page services agreement. The client is more likely to read and sign it quickly, which means you start work sooner.

Engagement letters are especially important for advisory and consulting work where deliverables are less tangible. "Strategic marketing advisory — 8 hours per month at ₹5,000/hour" is easier to dispute without a signed engagement letter confirming the arrangement.

Send the engagement letter after the client verbally agrees to proceed but before you start any work. Have the client sign and return a copy. In many jurisdictions, an unsigned engagement letter still carries legal weight if the client acts in accordance with its terms (e.g., by paying the first invoice), but a signed copy is always stronger.