Another recent decision of the Supreme Court addresses two key points. The first is the need to have agreed contract terms, before work starts under a contract and the second that, where a letter of intent is signed and work starts due to it, that a contract must be finalized as soon as possible after that. In this case, the parties entered into a contract formed by a letter of intent. When the letter of intent expired the work continued on, before the terms of the detailed written contract had been finalized.
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."