The parties had negotiated in detail the clauses which comprised the terms as amended and as such the clauses had been essentially agreed and varied. This case highlights the dangers inherent in starting work before a formal written contract is in place and such letters of intent should always be treated with caution. However, if a letter of intent is inevitable, this should: Clearly specify those contract terms that have been agreed and those that remain outstanding, so that there is no uncertainty over what has or has not been agreed between the parties; and
Why use a Letter of Intent?A Letter of Intent is a great tool to use in order to gauge the viability of purchasing a property given the price and terms you are looking for.A lot of times, I will use a LOI when I am trying to purchase an investment property for much less than the Seller is listing the property. I may also use a LOI if I am unfamiliar with the property and the area. I like to use a LOI in these cases to start the negotiating process while I do some due diligence work during the process.