What Is The Difference Between A Letter Of Commitment And A Contract?

A letter of commitment is a legal document from a lender to
a borrower that states that a loan has been approved as long as the conditions
laid out in the commitment letter are upheld. The document will usually include
the amount or sum at a particular rate of interest and the dates under
which the letter is valid. It my also include repayment information such as
monthly instalment figures and in some cases the penalties which will be
incurred if payment is in arrears or the loan is paid off early. The recipient
of the letter is not obliged to accept the loan offer and can apply to various
institutions to get various quotes. Acceptance is usually done through a formal
reply.



A contract is an agreement between parties which can be implied or expressed to
do or not do something. Contracts come is many forms and can be verbal or written
and can in some cases be legally enforced.  This is the simplest
understanding of a contract, if there is a specific contract type you want to
know about I can try and help you :)