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Business ET Letter

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BUSINESS ET LETTER

This Business ET Letter (the Agreement) is entered into as of by and between:

WHEREAS

WHEREAS, Party A is engaged in the business of providing professional services and has represented that it has the personnel, experience and capability to perform the services described herein; and

WHEREAS, Party B desires to engage Party A to perform certain services on the terms and conditions set forth in this Agreement; and

WHEREAS, the parties desire to document their agreement with respect to the scope of work, payment, confidentiality, and the term and termination of the business engagement.

SCOPE OF WORK

Party A shall perform the services described below and any ancillary tasks reasonably necessary for completion. Party A will perform the services with the degree of skill and care ordinarily exercised by members of its profession under similar circumstances.

PAYMENT TERMS

In consideration for the services rendered by Party A, Party B shall pay the fees and reimbursements in accordance with the following terms.

Unless otherwise agreed in writing, invoices shall be due and payable within days of invoice date. Late payments shall accrue interest at the lesser of per month or the maximum rate permitted by applicable law.

TERM AND TERMINATION

This Agreement shall commence on and shall continue in effect until unless earlier terminated in accordance with this Section.

Either party may terminate this Agreement for convenience upon providing written notice to the other party at least days prior to the effective termination date. Either party may terminate immediately for cause upon written notice if the other party materially breaches its obligations and fails to cure such breach within thirty (30) days after receipt of written notice describing the breach.

CONFIDENTIALITY

"Confidential Information" means nonpublic information disclosed by one party to the other that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure. The receiving party shall: (a) hold Confidential Information in strict confidence; (b) use Confidential Information solely to perform its obligations under this Agreement; and (c) not disclose Confidential Information to any third party except to employees or contractors who have a need to know and who are bound by confidentiality obligations at least as protective as those set forth herein.

Confidential Information does not include information that: (i) is or becomes generally available to the public through no act or omission of the receiving party; (ii) was rightfully known to the receiving party before receipt from the disclosing party; (iii) is independently developed by the receiving party without use of or reference to the disclosing party's Confidential Information; or (iv) is rightfully obtained from a third party without restriction on disclosure. Upon termination of this Agreement, the receiving party shall return or destroy all Confidential Information as requested by the disclosing party.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of without regard to principles of conflicts of law. The parties agree that venue for any dispute arising under this Agreement shall be in the courts located in that jurisdiction.

ENTIRE AGREEMENT

This Agreement, including any exhibits and attachments, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals, representations and understandings, whether written or oral. Any amendment or modification must be in writing and signed by authorized representatives of both parties.

MISCELLANEOUS

Neither party may assign this Agreement without the prior written consent of the other, except to a successor in interest to all or substantially all of its business. The provisions that by their nature should survive termination or expiration of this Agreement, including confidentiality, indemnification and limitations of liability, shall survive.

The parties have executed this Agreement by their duly authorized representatives as of the date first written above.

Party A Printed Name:

By:

Date:

Party B Printed Name:

By:

Date:

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What a Business ET Letter Is and when it’s used

A Business ET Letter is a formal corporate communication that documents authorization for electronic transmission, electronic transactions, or electronic recordkeeping on behalf of an organization. It typically names authorized signers or agents, describes the scope of authority (which types of documents or transactions are covered), and specifies effective and expiry dates. Organizations use this letter to create a clear audit trail, demonstrate consent to electronic processes under federal law, and provide contact details for verification. The letter does not replace statutory filings where a separate government form is required.

Why using a Business ET Letter adds legal clarity

A concise Business ET Letter records intent and consent for electronic dealings and identifies accountable parties, helping satisfy ESIGN and UETA requirements for intent, attribution, and record retention. It reduces ambiguity about who may sign or send documents electronically and supports consistent audit trails and internal controls.

Why using a Business ET Letter adds legal clarity

Who typically prepares and relies on a Business ET Letter

Organizations of many sizes use Business ET Letters to centralize electronic authority and to document consent for e-transactions before routine electronic activity begins.

  • Small business owners and founders who need documented authorization for outside vendors and banking transactions.
  • Finance and accounts payable teams that require named approvers for ACH, wire or electronic invoice approval.
  • Corporate legal departments establishing internal signatory rules and documenting delegation for compliance and audit.

Maintain a clear delegation record and update the letter when officers or authorized agents change to avoid disputes or rejected transactions.

Stepwise process to prepare and issue the letter

Follow a short sequence to draft, approve, sign, and distribute a Business ET Letter so it is admissible and actionable.

  • 01
    Draft: Populate required fields and clearly state the authority and scope.
  • 02
    Review: Have legal or finance confirm scope, limits, and signatory titles.
  • 03
    Sign: Obtain signatures from authorized officers using acceptable eSignature or wet-ink per counterparty instructions.
  • 04
    Distribute: Send certified copies to banks, vendors, and internal records; retain an audit trail.

Configure an online workflow for issuing a Business ET Letter

Set up the document workflow settings to control authentication, routing, and retention for electronic execution.

Field Configuration
Signer Authentication Email plus optional SMS code or ID check to verify signer identity
Signing Order Define sequential or parallel signing to enforce approval steps
Retention Policy Set automatic archive duration and export formats (PDF/A recommended)
Notifications Enable reminders and completion receipts to all parties

Where to send and how the Business ET Letter is used

A Business ET Letter is shared with internal teams and external counterparties that require proof of electronic authority.

  • Internal Records: Place signed copy in corporate minute book and finance records.
  • Banking Partners: Provide to banks for ACH, wire, and account authorizations when requested.
  • Vendors and Clients: Share with major suppliers and customers to validate who may bind the company.
  • Regulators or Advisors: Share with auditors, counsel, or regulators when authority documentation is required.

Technical and platform considerations for eSigning and eSubmission

Choose a platform that supports the file formats, authentication level, and retention rules your counterparties require.

  • File Formats: PDF, DOCX, and HTML support are typical; ensure signed output preserves timestamps and audit trail.
  • Integrations: Look for connectors to Salesforce, NetSuite, Google Workspace, Microsoft 365 and cloud storage.
  • Security: Platform should support TLS in transit and AES-256 at rest with audit logging.

Essential data points required on the letter

Entity Name: Full legal name
Signer Identity: Name and corporate title
Scope: Clear action limits
Effective Date: MM/DD/YYYY
Contact Info: Phone and email
Signature: Signed name and date

Main legal risks if the Business ET Letter is incorrect or incomplete

Unauthorized Actions: Counterparty may reject transactions if signer lacks documented authority
Contract Invalidity: Ambiguous scope can lead to unenforceable commitments
Regulatory Exposure: Noncompliance with sector rules (e.g., HIPAA) can trigger penalties
Tax Consequences: Incorrect payee details can trigger backup withholding obligations
Audit Findings: Insufficient retention or missing records may cause adverse audit results
Fraud Risk: Weak authentication increases risk of unauthorized signatures

Common mistakes to avoid when preparing the letter

  • Using an abbreviated or trade name instead of the registered legal entity name.
  • Granting open-ended authority without monetary or temporal limits.
  • Failing to update the letter after officers or signers change.
  • Relying on weak signer authentication when counterparties require stronger verification.

Real-world examples of Business ET Letters in use

Illustrative customer scenarios show how organizations use a Business ET Letter to streamline approvals and reduce friction.

Optica Ventures LLC

A venture services firm centralized electronic approval for invoices and cap table filings to reduce processing delays.

  • Implemented named signers and effective dates as core controls.
  • The company retained signed copies in a secure repository and used documented authority to satisfy bank and investor due diligence requirements, speeding routine transactions.

Martin Properties

A real estate operator used the letter to authorize property managers to execute lease addenda remotely.

  • Added property identifiers and scope limits for each manager.
  • This reduced in-person signings and clarified which managers could bind agreements within set dollar limits, improving closing times while preserving an auditable trail.

Who can sign a Business ET Letter and what their role implies

Authorized Officer

Typically a CEO, CFO, or other executive with delegated authority. This signer must be identified by title in the letter and have internal corporate authorization to bind the entity for the specified scope of transactions.

Authorized Agent

A designated individual or third-party agent acting under a written power of attorney or corporate resolution. The letter should reference any underlying delegation document and limit the agent’s authority to specific actions or dollar thresholds.

Typical timing and processing expectations

Set clear internal deadlines for drafting, review, execution, and distribution to ensure the letter is effective when needed.

Drafting Window:

Allow 3–7 business days for legal and finance review for standard letters

Approval Turnaround:

Expect 1–3 business days for signers to review and approve electronically

Execution Date:

Effective date should be specified; execution on or after that date is valid

Distribution Time:

Provide signed copies to banks and major vendors within 1 business day

Record Archival:

Archive executed letter immediately in a secure document management system

Frequently asked questions about Business ET Letters

Answers to common questions about validity, signing methods, and updating the letter to reduce execution delays.


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