What Actually Binds: Letter of Intent vs Offer Letter

A candidate has your letter in hand and has stopped answering calls. Or the role has been frozen and you need to pull the offer back. Either way the question is the same. Which of these letters can be enforced against you?

The answer is not about how the document is titled. It is about how far down the hiring process you have gone.

This guide sets out what a letter of intent vs offer letter each commits you to, and the exact moment your right to change your mind runs out.

Letter of Intent vs Offer Letter

Both are pieces of paper you send before someone joins. In law they sit at different distances from a contract.

The row that surprises people is the fourth one. A letter of intent is usually safe, but not because of its name.

What a Letter of Intent Commits You To

On its own, very little. In Dresser Rand versus Bindal Agro Chem, decided on 12 January 2006, the Supreme Court held that a letter of intent merely indicates a party’s intention to enter into a contract in future, and is not intended to bind either party.

That case was about industrial equipment, not hiring. But it is the leading Indian authority on these letters, and the reasoning holds for a job too.

So a letter of intent that says you hope to confirm a role next month, subject to approval, leaves you free. The candidate is equally free, which employers forget.

The same judgment carries the warning. A letter of intent may be read as an acceptance if that intention is evident from its terms.

So a letter of intent that fixes the salary, the joining date and the reporting manager can be treated as the binding document. The heading will not save you.

When an Offer Letter Starts to Bind You

An offer letter is a proposal. Section 2(a) of the Indian Contract Act says a proposal is made when one person signifies to another a willingness to do something, with a view to obtaining that other person’s assent.

Signifying willingness is not a contract. Section 2(b) supplies the missing half: when the person receiving the proposal signifies assent, the proposal is accepted, and an accepted proposal becomes a promise.

The timing is set out in section 4. Communication of an acceptance is complete against the person who made the offer when the acceptance is put in course of transmission, so as to be out of the power of the person accepting.

In plain terms, the clock stops when the candidate hits send. Not when you open the email, and not when they turn up on day one.

Can You Withdraw an Offer?

Yes, and there is a deadline. Section 5 says a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards.

Read with section 4, that gives you a window rather than a right. The table shows where it is still open and where it has shut.

That last row is worth designing for. An offer made subject to a clean background check, or to proof of notice served, gives you a stated reason to step back. One with no conditions gives you none.

Section 7 tightens this. To turn a proposal into a promise, the acceptance must be absolute and unqualified. A candidate who writes back asking for two lakh more has not accepted. They have made a fresh proposal, and you are free again.

Joining and Appointment Letters

Four documents get used in Indian hiring and the names are not standard across companies. What matters is the job each one does, and since the labour codes took effect on 21 November 2025 one of the four carries a duty behind it.

The Letter of Intent

This one goes out early, often before a salary is fixed. It keeps a candidate warm while you get an approval through.

The Offer Letter

This is the real proposal. It carries salary, role, joining date and any conditions, such as background checks or notice period proof.

The Appointment Letter

This one is no longer optional. Section 6(1)(f) of the Occupational Safety, Health and Working Conditions Code makes it a duty of every employer to issue a letter of appointment to every employee on appointment.

The Code also swept up existing staff. Anyone who had not been issued one before the Code started had to be given one within three months. Our guide to appointment letter formats covers what belongs in it.

The Joining Letter

Usually the shortest of the four. It confirms the person reported for duty on a given date, which is the date the rest of your employment records run from.

Only the last two normally survive as the record of the job. The first two are about getting there.

Where Employers Get It Wrong

The faults are rarely about the law. They are about writing one document and calling it another.

The non-compete one is worth stating plainly. Section 27 makes every agreement that restrains someone from exercising a lawful profession, trade or business void to that extent. Putting it in the offer letter does not change that.

Once the person joins, the paper stops being the record and the system takes over.

In Attendo (formerly Petpooja Payroll), the agreed salary structure sits in the employee master beside attendance and leave. So what you promised and what gets paid are the same figure, and adding a new employee is where that handover happens.

What to Put in Each Letter

The safest rule is to make each document look like what it is.

1. In a letter of intent, leave the salary out, or give a range. Say the offer is still to come.
2. Say plainly that the letter creates no obligation on either side.
3. In an offer letter, write the conditions you may need to rely on later.
4. Give the acceptance a deadline and a method, so you know when your window shuts.
5. Keep the non-compete out. It is void either way.

Point four does real work. Section 7 lets you prescribe how a proposal is accepted, so an offer that says acceptance must be by signed reply to a named address gives you a clear record of the date.

The short version is the one to keep. A letter of intent leaves you free, an offer letter ties you in once the candidate assents, and an appointment letter is now something you must issue whatever else you send.

For the documents that come after someone joins, see our experience letter guide and the termination letter formats.

One caution is worth keeping. This page explains the general contract rules that apply across India. Your own wording, your industry and any state rule can change the answer, so take advice before withdrawing an offer already accepted.

Frequently Asked Questions