April 12, 2021

Learn more about FindLaw`s newsletter, including our terms of use and privacy policies. First, it is forbidden to use letters to change the price in certain real estate transactions. Since a portion of the total price would be included in the subsidiary letter, it would explain a lower price in the primary contract, therefore reducing the tax base. In this case, the letter would not be valid and would also be punished against the parties to the subsidiary letter and the professional author. Third, by amending the terms of the primary contract, the letter could change the characterization of the whole agreement. In France.B certain management leasing contracts are entered into by parties to conceal the actual qualification of a contract, i.e. the purchase of the company. The preamble to the mailing note will both determine the intent of the parties and justify itself when it is made public. Due to the confidentiality of the letters, the confidentiality clause will also be a key element in determining the degree of (non) disclosure desired. Secondly, in most European countries, letters do not infringe the rights of third parties, who are known to you, both of them, of an informed letter, if it is beneficial to them.

An illustration of this rule can be found in a case in which the Supreme Court of France ruled that legitimate heirs could demand the reduction of a hidden gift contained in a letter signed by their author. However, in some situations, it is necessary to disclose letters of support for reasons of transparency. This may be the case, for example. B, for investors or even for third parties. In writing, it may be useful to change the terms defined in the primary contract. In the case of International Milling Co v. Hachmeister Inc., the parties to a sales contract used a letter to modify the quality requirements of the product delivered to make them more restrictive than the terms of the primary contract. The preamble and confidentiality clause of a mailing note are also essential concepts.

Some do not apply to all agreements (I), others only apply to some (II). In share purchase contracts, ancillary letters are sometimes added to presentations and guarantees to deal with issues such as tax debts or social issues that contracting parties do not want to know that the authorities are aware of.