Offer / Appointment Letter
An Offer or Appointment Letter is a formal document by which a company extends an offer of employment to a selected candidate. Once the candidate accepts the offer, it becomes a binding employment contract governed by the Indian Contract Act, 1872.
This letter records the fundamental terms of employment, such as role, compensation, and probation. It is a lighter instrument than a full Employment Agreement and is typically used for junior and mid-level hires.
- Governing law
- Indian Contract Act, 1872 + Code on Wages, 2019
When this is the right filing
- When making an offer of employment to a selected candidate for a junior or mid-level role.
- When you need a binding contract that captures the essential terms of employment without the complexity of a detailed agreement.
- When the company intends to issue a separate, detailed Employment Agreement for senior hires, and this letter will serve as the initial offer that cross-refers to that detailed agreement.
- Do not use this letter as the sole document for senior executives or key managerial personnel where detailed clauses on vesting, non-solicitation, or garden leave are required; pair it with a full Employment Agreement.
What the court looks for
- Clear identification of the employer and employee, establishing a contractual relationship.
- Unambiguous terms of compensation, including a basic salary and dearness allowance structure that is compliant with the Code on Wages, 2019 for correct PF and gratuity computation.
- Terms that do not fall below statutory minimums prescribed by the applicable Shops and Establishments Act and social security codes.
- Evidence of acceptance by the employee, which transforms the offer into a binding contract.
The structure the court expects
The components of the filed format, in the order they appear. LexPilot fills every one of them from your facts and papers.
I, [candidate name], have read and understood the terms set out above and accept this offer of employment unconditionally.
Bracketed items are filled from your case.
Frequently asked questions
Is an appointment letter a binding contract?
Yes. Under the Indian Contract Act, 1872, an offer of employment and its acceptance creates a valid and binding contract. The terms stated in the appointment letter become enforceable once the candidate signs and returns a copy to the employer.
Does this letter need to be printed on stamp paper or registered?
No. An appointment letter does not require stamp duty or registration. It must be printed on the company's official letterhead to be a valid and authentic instrument.
Can the salary structure in this letter override statutory PF and gratuity rules?
No. The statutory minimums under the Code on Wages, 2019 and the social security codes for PF, ESI, and gratuity apply mandatorily. Any term in the appointment letter that provides for a lesser benefit is void to that extent. The basic salary and dearness allowance should be structured to ensure correct statutory computation.
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