Comfort Letter
/ˈkʌmfərt ˈlɛtər/
Definitions
- (n.) A letter issued by a third party, often a bank or auditor, providing assurance or information but not constituting a formal guarantee or legally binding commitment.
The lender requested a comfort letter from the auditor to confirm the accuracy of the financial statements.
- (n.) A document commonly used in securities offerings or mergers and acquisitions to reassure parties about certain matters without creating enforceable rights.
The underwriters received a comfort letter from the accountant to support the offering process.
Forms
- comfort letter
Related terms
See also
Commentary
Comfort letters provide assurances that fall short of formal guarantees, so drafters should clearly distinguish them from binding commitments to avoid unintended liabilities.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.