Contracts
Dec. 4, 2012
Why letters of intent may be construed as legally binding
The line between an unenforceable "agreement to agree" and a binding contract can be an obscure one. By Diane Hvolka and Shelley Nelbert
The line between an unenforceable "agreement to agree" and a binding contract can be an obscure one. It was this ambiguity that determined the fate of a deal five years in the making, which culminated in a 38-page letter of intent (LOI) that unequivocally stated it was "fully binding." However, when one party unexpectedly abandoned the deal, a California court held that the LOI was non-binding. This outcome ...
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