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Home Q&A Forum Can a Letter of Intent be legally binding?

Business

Letter of Intent

New York

Asked on Jun 12, 2024

Can a Letter of Intent be legally binding?

I am currently in negotiations with a potential business partner to establish a joint venture, and we have exchanged a Letter of Intent outlining our intentions and key terms. However, I am unsure if this document holds any legal weight and can be considered binding in a court of law. I want to understand the legal implications of a Letter of Intent and whether it can be enforced if either party breaches the terms stated in the document.

1 Attorney answer

Answer

Business

New York

Answered 37 days ago

Damien B.

ContractsCounsel verified

Business Lawyer
Licensed in New York
Free Consultation

The enforceability of a Letter of Intent (LOI) depends on its wording. LOIs are usually intended as non-binding expressions of good faith and a framework for further negotiations. They often contain language stating they are not enforceable agreements. However, under certain circumstances, LOIs can become partially or fully binding. If you want the LOI to be legally binding, like confidentiality clauses, have a lawyer review it and ensure the wording reflects that intent. Given the potential complexities, consulting a lawyer experienced in business contracts is highly recommended. An attorney can analyze your LOI and advise you on its enforceability and how to proceed with your joint venture negotiations.

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