A Letter of Variation is a formal document used to modify or amend the terms of an existing contract or agreement. It outlines the specific changes being made, the reasons for these changes, and the effective date of the variations. The letter is typically signed by both parties to the agreement, indicating their mutual consent to the changes.

A letter of variation is often used in various contexts, including:

1. Employment Contracts: To modify employment terms, such as salary, job role, or benefits.
2. Business Agreements: To change the scope of work, payment terms, or delivery schedules.
3. Government Contracts: To amend the terms of a grant, funding, or procurement agreement.
4. Financial Agreements: To modify loan terms, interest rates, or repayment schedules.

The letter of variation serves several purposes:

1. Clarity: It provides a clear and transparent record of the changes made to the original agreement.
2. Mutual Consent: It ensures that both parties agree to the changes and understand their implications.
3. Legal Protection: It offers legal protection by documenting the changes and preventing misunderstandings or disputes.
4. Flexibility: It allows parties to adapt to changing circumstances or business needs.

A typical letter of variation includes:

1. Introduction: A brief explanation of the purpose and scope of the variation.
2. Changes: A detailed description of the specific changes being made to the agreement.
3. Effective Date: The date from which the changes will take effect.
4. Signatures: The signatures of both parties, indicating their acceptance of the changes.