Engagement Letter
An Engagement Letter is a document that sets out the business relationship between a client and a company.
Last updated October 23, 2025
Suitable for Australia
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Frequently asked questions
What does this Engagement Letter Cover?
- Purpose and scope of services
- Client responsibilities
- Period of engagement
- Confidentiality
- Estimated pricing
- Professional fees
- Terms of trade
Frequently Asked Questions
Who needs an engagement letter?
An engagement letter is needed in various professional fields and industries to formalise the client-service provider relationship and clarify expectations.
Examples include:
- Legal Services
- Accounting and Audit Services
- Consulting Services
- Financial Planning and Investment Services
- Real Estate Transactions
- Construction and Contracting Services
- IT and Technology Services
- Healthcare Services
- Freelance and Creative Services
- Nonprofit Organizations
- Insurance Policies
When do I need an engagement letter?
Engagement Letters are commonly employed when a professional services firm is enlisted by a client for a specific task or project.
Many businesses incorporate Engagement Letters into their client onboarding process. While typically less formal than contracts, Engagement Letters hold legal validity.
When should I send an engagement letter?
You can send an engagement letter in the following scenarios:
- Send an engagement letter when you onboard a new client or customer.
- Whenever you undertake a new project or provide a new service to an existing client outlining the scope, terms, and conditions related to that project or service.
- If there is a significant change in the scope of work, fees, or terms of the engagement
- For ongoing or retainer-based services, at regular intervals (e.g., annually) to reaffirm the terms of the ongoing relationship.
When should I update an engagement letter?
You may want to send an updated engagement letter in the following scenarios:
- If the scope of work evolves during the course of the engagement, update the engagement letter to reflect the current scope and any associated changes in fees or timelines.
- Any changes in the terms of the engagement, including fee adjustments for clarity
- If there are changes in laws or regulations that affect the engagement
- If the client requests modifications to the engagement terms or if both parties agree to certain changes, then to document these adjustments.
- In longer-term projects with milestone achievements, consider updating the engagement letter to reflect progress and any adjustments to the original terms.
Consider reviewing and engagement letters periodically to ensure they remain accurate and relevant.
Other documents you may need:
View Sample Engagement Letter
The Legal Risk Score of a Engagement Letter Template is Low
Our legal team have marked this document as low risk considering:
- The pricing estimates provided are indicative and not binding, which means the actual fees might exceed initial expectations.
- The client is solely responsible for the accuracy and completeness of the information provided, which could affect the quality and applicability of the services received.
- While confidentiality is maintained, information may be disclosed as required by law or with the client's express consent, potentially exposing sensitive information under certain circumstances.
Articles about Engagement Letter
What Is An Engagement Letter?
Raja Abbas Content Writer Based in Sydney, Raja is a law student enrolled in a Bachelor of Laws and Bachelor of Communications (Writing and Publishing) at the University of Technology Sydney. He is passionate about transferring knowledge in relation to businesses, legal advice and marketing direction. Raja has experience working in immigration law and is […]
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