Aashnaa GB Started The Discussion:
Pls. educate me what is the difference between 'Letter of Intent', 'Offer Letter' and 'Appointment Letter'.
I urgently need this information. Quick responses will be highly appreciated.
Question is very nice.
Lets start from basics
The term employment is basically a contractual relationship between employer & employee, where there is definite & tangible/Intangible consideration for both the parties .
Now in a contractual relationship there are two important elements
The above forms premise for the question raised by you.Pl find point wise reply to your querry
1. Letter of Intent - Law says mere intention to do something, is not binding on the parties involved .Implying that , the agreement is not enforceable in the court of law , in the event of eventuality , say if the candiate does not join or if the employer on or before the date of joining dissolves the said position.Therefore, letter of Intent is basically a document illustrating the willingness of the employer to hire the candidate but may or may not turn into successful hiring .This is generally practiced by the firms who are having water tight and fierce competitors in the market.Generally, it does not carry any compensation/Emolument data .
2. Offer - Again going by the contract Act, In offer there is definite intention to enter into legally binding relationship.offer involves expression of interest by one party to the other , to do or not to do something (Excluding acts of impossible nature or acts which are void ab intio ).In an offer letter the , term of offer are un-ambigous and definite , with intention to create a legal relationship.
3. Appointment Letter - This is basically , a form of contract between the parties involved viz. employer & employee .as such it involves offer + acceptance +enforcibility by the law .(Hence , it qualifies to be a contract )
Putting it simply-
A Letter of Intent or LOI is like a prelim document setting out the udnerstanding between two parties who want to contract with each other. It is not necessary this is confined to one sphere of contract such as an employer-employee relationship. It includes various businesses. This can be binding or non-binding legally, depending on what the Parties specifically agree it to be.
An offer letter is the document that sets out the terms on which an Offerer (the person making an offer) is offering the setting up of a formal relationship to the Offeree (the person to whom an offer is made). This can be for instance, the terms of service which an employer offers to a chosen/ potential employee. This letter is not binding on the Offeror, unless it has so been accepted to by the Offeree. The Offer letter can also be more generalised and set out only the broad terms of the deal, and leave the actual details to be captured by the parties in a subsequent contract between them.
An Appointment letter is a stage after the Offer letter. This is the letter provided by an Offeror to an Offeree after the Offeree has accepted the Offerer's terms of Offer informed to him/her and is ready to take up appointment to a certain post based on such terms. But again, this is not a formal Employment or engagement contract but just a document evidencing the terms for appointment (as may have been agreed to by the parties in prior negotiations of the Offer letter or in person).
when does the letter of intent/offer letter become legally binding on either parties. usually the candidate resigns from the previous employer based on these letters. can the selected candidate refuse to join having given his acceptance in the letter of offer, or can the employer refuse to take in a selected candidate after his acceptance and before he actually joins, while the candidate would be put to a difficult personal situation although.
what exactly is the legal position on this in terms of letter of intent/offer letter. what are the ethics involved and good practices. any known standard quoted case laws especially in recent times with changing jurisprudence and mass recruitment and sudden recessionary experiences lately.
hope the discusssion gets enriched further as an learning experience here.
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