Side Letter (Contracts): Template and How to Draft One (2026)

What a side letter is and when you need one A side letter is a separate written agreement that sits alongside a main contract and changes, clarifies or adds to it for one or more of the parties. It is used when the parties want a specific arrangement that does not belong in the main document, often because the main contract is a standard form that many people sign, or because one party has been granted a term the others do not get. Side letters are common in investment funds, commercial leases, loan facilities, employment packages and supply deals. You need a side letter when you want to vary the standard deal for a particular party without rewriting the main contract. A fund might give one large investor a fee discount or a reporting right through a side letter. A landlord might grant a single tenant a rent free period. A lender might agree a specific waiver with one borrower. The main contract stays intact for everyone, and the side letter captures the special arrangement. A side letter is a binding contract in its own right, provided it meets the normal requirements for a contract. Because it changes the deal, it must be drafted to work with the main contract, not against it, and it must say clearly how the two documents interact. This page is general information, not legal advice. ## A side letter template you can copy ```

SIDE LETTER [Date] From: [Party A name and address] To: [Party B name and address] Re: Side letter to the [name of main contract] dated [date] between [parties] (the "Main Agreement") Dear [name], This side letter records terms agreed between us in connection with the Main Agreement. Words defined in the Main Agreement have the same meaning here. 1. RELATIONSHIP TO THE MAIN AGREEMENT This side letter forms part of and is to be read with the Main Agreement. If there is a conflict between this side letter and the Main Agreement, this side letter prevails [as between the parties to this letter only]. 2. AGREED VARIATIONS The parties agree the following in relation to the Main Agreement: (a) [describe the specific variation, e.g. a fee discount, a waiver, an extra right or obligation, clearly referring to the relevant clause number]; (b) [second item, as needed]. 3. SCOPE AND CONFIDENTIALITY These terms apply only to [Party B] and do not affect any other party to the Main Agreement. The parties will keep this side letter confidential, except as required by law. 4. DURATION This side letter applies for [the term of the Main Agreement / the period stated] and ends when [the Main Agreement ends / the stated event occurs]. 5. EVERYTHING ELSE UNCHANGED Except as varied by this side letter, the Main Agreement continues in full force. 6. GOVERNING LAW This side letter is governed by the law of [place], matching the Main Agreement. Please sign and return the enclosed copy to confirm your agreement. Signed for [Party A] ____________ Agreed by [Party B] ____________

- Vague variations that do not point to the clause being changed, making the side letter hard to enforce.
- A side letter that quietly contradicts a no oral modification or entire agreement clause in the main contract.
- Granting one party a term that breaches a most favoured nation promise given to another, a common trap in funds.
- No end date, so the side letter lingers after the main contract is gone.
- Keeping the side letter so separate that the people administering the main contract never know it exists. ## Keeping side letters tied to the contracts they change The danger with side letters is not writing them, it is losing them. A side letter is a small document that changes a big one, and it is easy for it to end up in a different folder, forgotten by the team that administers the main contract. Months later someone enforces the standard terms, unaware that one party was granted something different. The work that outlasts signing is keeping every side letter attached to the contract it varies and visible to the people who need it. That is the same problem behind contract management in general: drafting from a clear template, catching a variation that conflicts with the main deal, editing terms in plain language, and keeping every related document linked and findable, all in one place. [Adira](https://adiralaw.com) is built around that single workspace idea for business contracts, modelling a contract as a structured document so related terms and changes can be linked rather than lost, with the deepest coverage today for Indian law and other jurisdictions being broadened. For a single side letter the template above is enough. The point worth borrowing is that a side letter only works if it stays tied to the contract it changes.