Letter of Intent (LOI)
An agreement to enter into an agreement
Parties may not be bound by any terms of the LoI in the event of
failure of negotiation and no definitive agreement is reached.
An agreement with open terms
Parties will be bound by an implied contract based on the basic
terms stated in the LoI even if they fail to reach a definitive
agreement.
LoI may be a binding contract depending on the terms and clauses used in
the LoI.
Functions of LoI
Expresses a convergence of will between the parties, indicatingS
an intended common line of action.
Clarify key points of a complex transaction for the convenience
of the parties
Declare that parties have entered into negotiation
Provide exit mechanism in the event of failure of negotiation
Provide safeguards in the event of failure of negotiation
Provides for exclusivity (during process of negotiations)....to be contd
No comments:
Post a Comment