Common Contracts
1 similar Letter of Comfort contracts
Letter of ComfortLetter of Comfort • April 23rd, 2021
A parent company may be called upon to provide some comfort to a party entering into a contractual relationship with its subsidiary. This comfort may take the form of a guarantee of some undertakings by the subsidiary (see model: Guarantee Agreement) or may be in a weaker form which is generally known as a Letter of Comfort (“patronaatsverklaring/lettre de confort”). In a Letter of Comfort the parent company does not bind itself to pay the debts of its subsidiary in the case that the subsidiary does not pay. The parent company confines itself only to its own specific legal obligations. The title given to such a document is of no legal value. The letter needs to be carefully drafted in order to properly determine whether the parent company is entering into real commitments to the recipient of the letter or rather is making non-binding statements of facts relating to itself or to its subsidiary, or is merely acknowledging the existence of a certain event or policy. The model contains dif
