Letter of License Law and Legal Definition
Letter of license means an agreement made by creditors to their insolvent debtor to get more time for paying his/her debts and to get protection from arrest of his/her person or property till the expiration of such additional time. It is also called as letter of leniency
Therefore, a letter of license grants the following:
the debtor more time to pay debts;
the debtor time to continue business in the hope of getting over its financial distress; and
the debtor protection from arrest, lawsuit, or other interference while the letter is in effect.
