Side Letter Template for the United Kingdom
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What is a Side Letter?
A side letter is a supplementary agreement that sits alongside a main contract and varies, clarifies, or supplements specific terms without rewriting the original document. It is commonly used to record concessions, bespoke commercial arrangements, or confidential terms that the parties do not wish to include in the primary agreement. Side letters are legally binding when properly executed and supported by consideration, and they should clearly state how they interact with the underlying contract.
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Frequently Asked Questions
Is a side letter legally binding?
Yes, a side letter is binding if it is properly executed and supported by consideration or executed as a deed. It must show a clear intention to create legal relations and vary or supplement the main contract.
Does a side letter override the main contract?
It depends on what the documents say. To avoid uncertainty, the side letter should expressly state whether it takes priority over conflicting terms in the underlying agreement.
Why use a side letter instead of amending the main contract?
Side letters are often used to keep sensitive commercial terms confidential, to record concessions quickly, or to avoid reopening a fully negotiated agreement. They can be a practical way to make targeted changes without renegotiating the whole contract.
Do the same signatories need to sign the side letter?
Generally the same parties to the main contract should be parties to the side letter, and it should be signed by someone with authority to bind each party. If the original was executed as a deed, the side letter may also need to be a deed to vary it effectively.
Does this guidance apply across the whole UK?
The general principles apply throughout the UK, but Scotland and Northern Ireland have distinct rules on contract formalities and property. Take local advice where the arrangement involves Scottish or Northern Irish law.
About the Side Letter
A Side Letter usually covers the following.
- Parties and Recitals: Identify the same parties as the main contract and recite the date and title of the underlying agreement being varied or supplemented.
- Reference to the Main Agreement: Clearly define the principal contract so there is no doubt about which document the side letter attaches to.
- Varied or Supplemental Terms: Set out precisely which provisions are amended, added, or clarified, ideally cross-referencing the relevant clause numbers.
- Priority and Interpretation: State whether the side letter prevails over the main contract in the event of any conflict between the two documents.
- Duration and Scope: Specify whether the side letter applies for the full term of the main agreement or only in defined circumstances or periods.
- Confidentiality: Include confidentiality obligations if the arrangement is intended to remain private between the parties.
- Governing Law and Jurisdiction: Confirm that the side letter is governed by the same law and jurisdiction as the main contract, usually the law of England and Wales.
- Execution and Consideration: Provide signature blocks and ensure the arrangement is supported by consideration or executed as a deed to be enforceable.
GOVERNING LAW
Applicable law
This Side Letter is drafted to comply with United Kingdom law. Key legislation includes:
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