A fundamental flaw of the LOI, lies in what Vasilios J. Kalogredis, a Wayne, Pennsylvania attorney, calls "the uncertainty and potential risk of any such undertaking." Kalogredisis, a business contract law expert, explains it this way: "Letters of intent are often touted as a 'non_legally binding' way to get the parties to set forth in writing what the undertaking is among them relative to a transaction. Too often, parties will sign such a document, feeling that they have little or nothing to lose by doing so... [True, that's] one of the attractive elements of the letter of intent [its purported non_binding nature]. However, courts have found letters of intent to create binding obligations, even if the letter itself does not explicitly state that it is binding... certain provisions within the document may indeed [still] have legal effect."
A letter of intent (LOI) must have five basic elements in its content: 1.The buyer's name 2.The property address and description 3.Your offer which includes: a.Purchase price b.Down payment c.Terms d.Conditions e.Due diligence time f.Closing time g.Any other clauses or provisions h.When a formal contract will be written up if the LOI is approved 4.A clause that makes the LOI non_binding 5.Your signature and a place for the seller's signature