comfort letter

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.

Collins Dictionary of Law © W.J. Stewart, 2006