Project schedule Management A letter of agreement form is a document used to explain the terms and conditions of a s relationship. It takes the terms and conditions that would be found in the actual contract and summarizes them in letter form. The parties can then finish negotiating the details before it is put together as a legally binding contract. A letter of agreement can, in some states, be legally binding if it is signed by all participating parties. Q1. Prepare a Sample Template for a Letter of Agreement in a Project