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
What Is Included In A Letter of Intent? As it pertains to the buying and selling of an early education company (childcare centers or schools), a Letter of Intent ("LOI") is a written statement expressing the intention of the participating parties to enter into a formal agreement. A LOI is not a formal agreement or a binding contract. The LOI serves the very important purpose of defining the agreed upon terms of a transaction so there are no misunderstandings between the parties, but it does not provide the detail found in a Purchase Sale Agreement.