Offer Letter vs Appointment Letter vs Employment Agreement

What is an offer letter, and is it binding?

An offer letter sets out the main terms on which the company proposes to hire you: designation, CTC, joining date, location and conditions such as background verification, document checks or completion of your degree. In contract law terms, it is a proposal under Section 2(a) of the Indian Contract Act, 1872. When you accept it, by signing or by email, Section 2(b) treats the proposal as accepted, and an agreement with consideration on both sides can become a contract.

Most offer letters are conditional. If the conditions are not met, for example your background check fails, the employer can usually withdraw without liability. If the conditions are met and the employer still withdraws, the employer may be in breach. Under Section 73 of the Contract Act, the usual remedy is compensation for loss that naturally arose from the breach. Courts do not normally force an employer to take you on, because contracts of personal service are generally not specifically enforced under the Specific Relief Act, 1963.

Before acceptance, an offer can be revoked. Section 5 of the Contract Act allows a proposal to be revoked any time before the communication of acceptance is complete as against the proposer. That is one reason to accept clearly and in writing once you have decided.

What is an appointment letter?

The appointment letter confirms your employment once you join, or around the time you join. It used to be a formality at many companies. Under the Labour Codes, which came into force on 21 November 2025, Section 6(1)(f) of the Occupational Safety, Health and Working Conditions Code, 2020 requires employers to issue a letter of appointment to every employee, in the form the rules prescribe.

The appointment letter typically records your designation, category of work, wages, date of joining and key service conditions. Central rules have been notified and State rules vary in timing and detail, so the exact required contents depend on which appropriate Government's rules apply to your employer. Our separate guide on appointment letters covers that checklist.

If you only received an offer letter and nothing at joining, it is reasonable to ask HR for the appointment letter. It is now a legal requirement, not a favour.

What is an employment agreement?

The employment agreement, sometimes called a service agreement or employment contract, is the long document. It sets out duties, working hours, leave, probation, confirmation, notice period, termination grounds, confidentiality, assignment of intellectual property, data protection, non-solicitation, any post-employment restrictions, and how disputes will be resolved.

Not every employer uses one. Some put the full terms in the appointment letter and an HR policy manual. Others use a short offer letter and a detailed agreement signed on day one. Either approach works legally, as long as the terms are clear and lawful. For example, a clause stopping you from working for a competitor after you leave will be tested against Section 27 of the Contract Act, which makes agreements in restraint of a lawful profession, trade or business void to that extent, whichever document it appears in.

In larger industrial establishments, standing orders under the Industrial Relations Code, 2020 also set service conditions for workers, and individual contracts are read alongside them.

What changed with the Labour Codes?

Before November 2025, a written appointment letter was required only under some State laws and for some categories of workers, so many people worked for years on an offer letter alone. The OSH Code changed that by making the appointment letter mandatory. The Code on Wages, 2019 also introduced a uniform definition of wages, which affects how salary is structured in these documents, and the Industrial Relations Code, 2020 recognised fixed-term employment across sectors.

If your documents were issued before the Codes and still describe terms under repealed laws, ask HR whether an updated appointment letter will be issued. Old documents do not lose effect overnight, but any term that conflicts with the Codes will generally give way to them.

Are offer letter and appointment letter the same?

In short, the appointment letter and offer letter are not the same, and the employment agreement and offer letter are not the same either, even though some employers combine two of them into one document.

Which document wins if they say different things?

Mismatches are common. The offer letter says 30 days' notice and the agreement says 90. The offer letter mentions a joining bonus with no clawback and the agreement adds a repayment clause. The location in the appointment letter is "anywhere in India" while the offer letter said Bengaluru.

Courts start with the documents themselves. Many employment agreements contain an entire agreement clause stating that the agreement replaces all earlier discussions and documents, including the offer letter. If you sign such a document, the later terms will usually govern. Where there is no such clause, a court will try to read the documents together, prefer specific terms over general ones, and look at which document the parties actually acted on. Ambiguous terms drafted by the employer are often read against the employer, but that is a tool of interpretation, not a guarantee.

The practical lesson is simple: do not assume the offer letter protects you if you then sign something different. Compare the documents before you sign the last one, and get any difference fixed in writing.

Can an offer be withdrawn after you resign from your current job?

This is the scenario people fear most. You accept, resign and serve notice, and a week before joining the company withdraws. If the withdrawal is not based on a condition in the offer letter, you may have a claim for compensation for the loss caused, such as lost salary for a reasonable period while you look for work. The amount depends on the facts, including how quickly you find another job, because the law expects you to take reasonable steps to reduce your loss.

Keep the offer, your acceptance, your resignation and all emails. A clear written record makes a legal notice credible and often leads to a negotiated settlement without a suit.

Can you negotiate the employment agreement?

Yes, and the best time is before you resign from your current job. Once you have resigned, your bargaining position is weaker, so ask for the full employment agreement along with the offer letter, not on your first day.

Most HR teams will not rewrite a standard template, but they often agree to targeted changes: reducing a non-compete to a non-solicitation clause, limiting the IP clause to work done in the course of employment, carving out a listed side project, making the notice period equal for both sides, or capping a training bond at actual documented costs. Ask for any change in writing, either as a signed amendment or a side letter that the agreement expressly preserves.

If HR says a clause "is never enforced", ask for that to be written down. A clause you signed is the clause you will be measured against later.

Do these documents need stamp duty or registration?

Employment documents do not need registration. Stamp duty depends on the State. Many employers execute employment agreements on stamp paper or pay duty as an agreement under the State's stamp schedule, while offer and appointment letters are usually issued unstamped. If an employer may one day sue on a bond or restrictive clause, correct stamping matters, because an understamped document is not admissible in evidence until the duty and penalty are paid. For the employee, the bigger issues are the content and the consistency of the three documents.

What to check across all three documents

• Designation, reporting line and work location match across documents.
• CTC breakdown: fixed pay, variable pay, and how the variable part is decided.
• Probation length, and notice during probation versus after confirmation.
• Notice period for both sides, and whether payment in lieu is allowed.
• Joining bonus, relocation or training cost recovery, and when it becomes repayable.
• Intellectual property clause: whether it extends beyond work done in the course of employment.
• Post-employment restrictions: non-compete, non-solicitation and their duration.
• Dispute resolution: arbitration seat, governing law and courts with jurisdiction.
• Any reference to repealed laws such as the Industrial Disputes Act, 1947, which suggests an outdated template.