Accounts Receivable Letter Contracts Policy

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This policy defines the circumstances under which a letter contract can be accepted. A letter contract can cover commencement of manufacture and performance of services (including design, pre-production planning and procurement of necessary materials).

In this sample, it is the position of a company not to accept letter contracts. Every attempt will be made to fully definitize the sale prior to (i) expending any effort or funds or (ii) acknowledging acceptance of the order. In the event a letter contract is mandatory, such action will require the general manager’s concurrence.

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