A Practical Guide to Letters of Comfort

"Letters of comfort" are used in many spheres of industry, commerce, regulated and state-controlled activities, government and regulation.

Letters of comfort may be mere expressions of goodwill, vary through representations or statements giving rise to potential liabilities or be enforceable undertakings by way of guarantee or indemnity. There are many traps for the unwary in this field.

This newly updated briefing note addresses letters of comfort addressed by private sector parent companies or group members to providers of credit or of credit based services ("banks") to a subsidiary or fellow subsidiary, incorporated joint venture, etc. It is a practical guide to Letters of Comfort dealing with the sorts of questions that can arise when deciding to issue a letter of comfort or when drafting it. The briefing note aims to provide comprehensive coverage including details of relevant case law and a checklist of processes to work through at inception and during the life of a letter of comfort.

A poll of a panel of our members indicated that Comfort Letters were very much still in use and hence an update was warranted. First published in April 2007, the content has been reviewed and revised as necessary. Two new inserts are Letters of Comfort and Sharia Law on page 13 and Appendix 3 An International Perspective on page 36.

Archive: A Practical Guide to Letters of Comfort: 2007

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