A Letter of Liability for Damages is a document used in business dealings that serves to assign responsibility and financial accountability when one party’s careless or intentional actions have led to harm caused to another. It states that the liable party is legally required to provide compensation to the injured party, either through payment or some other mutually agreed-upon form of satisfaction. No court order or enforceable contract is necessary—a letter of liability is enough to ensure that both parties understand their respective obligations. It can help prevent costly legal proceedings and save time, money and energy.