The Concluded Bargain: Near Enough Good Enough?

A letter of intent can undoubtedly be used effectively to quickly kick off a project or as a temporary solution pending the parties' agreement on the formal agreement. In the right circumstances, and if used appropriately, a letter of intent can set the foundation for a good working relationship between the parties.

It is, unfortunately, a common occurrence that a letter of intent tends to create more problems than it resolves. All too frequently after the signing of a letter of intent, the parties neglect to formalize the main agreement and simply rely on the letter of intent. It is also a known practice, especially for engagements with low fee values, that letters of intent are used to circumvent the difficulties that typically arise in commercial negotiations given the number and complexity of issues in both standard and bespoke forms of contracts.