comfort letter


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comfort letter

a letter in business matters written to assure another party of the writer's intentions. It is essentially not supposed to be binding in law but can allow negotiations or commerce to continue. Examples are in relation to contract negotiations and in relation to the absence of permissions from local authorities.

A special instance is a communication from the commission of the European Union to the effect that an agreement submitted for an exemption under Article 81 (formerly Article 85) of the competition law does not infringe Article 81 or that if it does infringe Article 81 it still qualifies for an exemption. Following such a communication, the Commission will normally close its dossier. Comfort letters must be taken into account by national courts as important ‘indications’. A comfort letter rejecting the complaint and closing the file maybe the subject of an action since they have the content and effect of a decision.

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Mr Donaldson said: "Is one or both in possession of an OTR Comfort Letter or a Royal Prerogative of Mercy?
KAPCO SELL-OFF PLAN FACES DELAY (RECORDER): Kapco privatization faces delay as issues of required comfort letter for the extension of PPA and others remain unsettled.
She said discoms are taking a loan of ` 11,000 crore and this is a comfort letter for that which is just a formality.
Financial backers and debt providers of Core Citadel Capital platform company Egyptian Refining Company have received a renewal of its comfort letter from the Government of Egypt, signaling unwavering state backing for the strategic $3.
The News' (daily) on February 15, 2010 reported that under the comfort letter, the government of Pakistan would allow the third country to import gas through [the] IP line in case any country in future comes to join the project, but the permission will be subject to the gas tariff and transit fee to be worked out as per best practices of that time.
The comfort letter included a clause which prevented Sir Stelios from speaking negatively about the airline, while also preventing him from either setting up a rival airline or becoming a significant holder in another carrier.
The time lag imposes financial burdens on companies since they cannot reflect in their financial statements the changes to the Act presaged by the comfort letter.
This comfort letter included a 'mutual respect' clause which prevented Sir Stelios from speaking negatively of the airline, while also preventing him from either setting up a rival airline or becoming a significant holder in another carrier.
The government gave a comfort letter guaranteeing that PLN would meet its obligation to the investors.
On the issue of comfort letter, the source said as per this letter, the Government of Pakistan would have to allow a third country to import gas through IP pipeline in the event of any such country joining the project in the future.
Fayyad is seeking a so-called comfort letter from the Washington-based international lending agency to obtain short-term private bank funding, the sources said, speaking on condition of anonymity.
Underwriters are required to obtain a comfort letter from the accountants as part of their due diligence under the securities laws.