ANALYSIS: Is My Letter of Intent Binding?

Dec. 30, 2021, 10:00 AM

“Is my letter of intent binding?”

If you have to ask the question, you are probably already in trouble.

This issue typically arises when a transaction that has been set out in a letter of intent (LOI) fails to materialize—and one of the parties has invested more deeply than the other in the closing. It then becomes critical to determine whether the aggrieved party can use the preliminary document as the basis for a breach of contract claim. In a recent case, the apparently financially distressed seller was sued on an LOI, before going into bankruptcy—and the deciding court said ...

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