Today I answered a Quora question about what a letter of intent is and what it should contain. The question and my answer (each edited slightly) are reproduced below.
Q. What is a letter of intent? What are the legal implications of a letter of intent? What is the purpose? Which elements minimally comprise a letter of intent?
Purpose of a Letter of Intent
A. A letter of intent usually provides a relatively brief summary of a relationship into which the parties intend to enter. It specifies that they will enter into good-faith negotiations leading to a definitive agreement governing that relationship.
Contents of a Letter of Intent
As concerns what should be included, in my opinion…
- Most important (and most overlooked when the letter is prepared by non-lawyers): Specify which provisions are binding and which are non-binding.
- Second most important (and often overlooked when the letter is prepared by non-lawyers): A provision stating that neither party need execute a definitive agreement until and unless the party is satisfied that the agreement meets its needs.
Dana H. Shultz, Attorney at Law +1 510 547-0545 dana [at] danashultz [dot] com
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