Mandate Letter Template for the United Kingdom
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What is a Mandate Letter?
A mandate letter is a document that sets out the terms on which a client appoints and authorises a professional adviser, agent or intermediary to act on the client's behalf for a defined purpose. It is commonly used in corporate finance, investment banking, advisory and agency arrangements to record the scope of the engagement, the fees payable and the extent of the adviser's authority. The letter creates a binding contract once signed and helps prevent disputes about what each party agreed to do. It sits alongside, or can form part of, a wider engagement or retainer arrangement.
Frequently Asked Questions
What is the difference between a mandate letter and an engagement letter?
The terms overlap and are sometimes used interchangeably. A mandate letter tends to focus on authorising an adviser or agent to act on a specific transaction or matter, while an engagement letter often sets out the broader terms of a professional retainer.
Is a mandate letter legally binding?
Yes, once it is signed and the usual requirements of a contract are met, a mandate letter is binding on both parties. It is sensible to keep the scope, fees and termination terms clear to reduce the risk of disputes.
Should a mandate letter be exclusive?
That depends on what the parties agree. An exclusive mandate prevents the client appointing other advisers for the same matter during the term, which advisers often request to protect their fees, so consider the commercial trade-offs before agreeing.
Do the same rules apply in Scotland and Northern Ireland?
Much of the relevant law applies across the UK, but contract law and court procedure differ in Scotland and Northern Ireland. Where the mandate has a connection to those jurisdictions, take local advice on governing law and enforcement.
Can I terminate a mandate letter early?
Early termination depends on the terms of the letter, including any notice period and provisions on accrued or success fees. Terminating outside the agreed mechanism could expose you to a claim for breach of contract.
About the Mandate Letter
A Mandate Letter usually covers the following.
- Parties and appointment: Identifies the client and the adviser or agent and confirms the client's appointment of that party to act.
- Scope of the mandate: Describes precisely the services, transaction or matter the adviser is authorised to carry out and any express limits on that authority.
- Exclusivity and duration: States whether the appointment is exclusive, when it starts and how long it lasts or how it can be renewed.
- Fees and expenses: Sets out the fee structure, success or retainer fees, VAT treatment and how expenses are reimbursed.
- Duties and standard of performance: Specifies the adviser's obligations, the standard of care expected and any reporting or updating requirements.
- Confidentiality and conflicts: Requires the parties to keep information confidential and to disclose or manage any conflicts of interest.
- Liability and indemnities: Allocates risk between the parties, including any caps on liability and indemnities, subject to what the law permits.
- Termination: Explains how either party can end the mandate, notice periods and what happens to accrued fees on termination.
- Governing law and jurisdiction: Confirms which law governs the letter and which courts have jurisdiction over disputes.
GOVERNING LAW
Applicable law
This Mandate Letter is drafted to comply with United Kingdom law. Key legislation includes:
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