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8 Steps to Keep Your Letter of Intent Non-Binding
You own commercial real estate and sign a letter of intent that contains the material deal points for your transaction. At the end of the letter, it clearly states: “Unless a formal agreement is entered into within 30 days of the date of this letter, this letter of intent shall be non-binding and of no further force or effect.” Sounds clear enough. But be careful, you can be bound by a letter of intent, even if it states it is non-binding. The two main issues used by courts to determine whether a letter of intent is binding or not are the parties’:
• Intent, as expressed in the letter of intent, and
• Actions, taken after the letter of intent is signed.
Below are eight simple steps you can take, and a sample non-binding clause you can use, to help ensure that your letter of intent will remain non-binding:
1. Language should not imply the existence of a binding agreement. Avoid using language that can be interpreted as creating a binding agreement. Language included in a letter of intent such as “agree,” “offer,” “acceptance,” or “offer will be null and void if not accepted by xx/xx/xx" may be interpreted as...[read more]
Angel Law Offices - Commercial Real Estate Lawyers - Los Angeles | Denver | Boulder
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