Is A Letter Of Intent Ever An Enforceable Agreement?

When does a letter of intent become a contract? How refundable is a refundable deposit pre-contract signature? These are re-occurring issues in cross border aircraft sale and purchase agreements.

In Charles Shaker v .Vistajet Group Holding SA¹, the claimant made an application for summary judgement for the return of a deposit paid pursuant to a letter of intent ("LOI") in respect of a potential aircraft purchase contract. The issues before the Court were:

1. Enforceability - Mr Justice Teare stated that an agreement to proceed in good faith and use reasonable endeavours to agree Transaction Documents and obtain confirmation of financing does not give rise to an enforceable obligation at law.