comfort letter
a letter in business matters written to assure another party of the writer's intentions. It is essentially not supposed to be binding in law but can allow negotiations or commerce to continue. Examples are in relation to contract negotiations and in relation to the absence of permissions from local authorities.
A special instance is a communication from the Commission of the European Union to the effect that an agreement submitted for an exemption under Article 81 (formerly Article 85) of the competition law does not infringe Article 81 or that if it does infringe Article 81 it still qualifies for an exemption. Following such a communication, the Commission will normally close its dossier. However, the letters are only administrative letters, so are not binding on national courts. Neither are they open to challenge in annulment proceedings before the Court of Justice of the European Communities.

Collins dictionary of law. . 2001.


comfort letter
This term has more than one meaning depending on the context in which it is used:
• In competition law, a letter stating that the European Commission intends to close its file and take no further action in relation to an agreement which has been notified to it. This may be because the notified agreement falls outside Article 81(1) of the EC Treaty or because it benefits from a block exemption or would merit an individual exemption under Article 81(3).
• In banking terms, a written assurance, often issued by the seller's parent company or bank, which is intended to offer comfort to the buyer as to the seller's ability or willingness to perform its obligations.
• In equity offerings, a letter from the issuer's accountants delivered to the underwriters as part of the due diligence process to provide, amongst other things, independent assurance that no serious adverse changes have occurred in the financial condition of the issuer during the period since its last audited financial statements up to closing.
Related links
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+ comfort letter
USA
A letter written by a company's auditors and delivered to the underwriters of a registered offering or to the initial purchasers or placement agent in a Rule 144A private placement offering. The comfort letter compares the financial information included in the registration statement or private placement memorandum, as applicable to the audited and unaudited financial statements and may also discuss the results of certain additional agreed procedures.
See Practice Note, Comfort Letters: Purpose and Process (www.practicallaw.com/3-383-8858).

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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