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Letter Of Intent FAQ United Kingdom
A Letter of Intent helps to formalize issues relating to the intended transaction. It allows the parties to clearly state and compare their expectations for any future agreement. The Letter of Intent can also be used in discussions with bankers and investors as evidence of serious negotiation.
Parties should remember that a Letter of Intent is NOT binding. The purpose of a Letter of Intent is only to help finalize the details of a future agreement. The parties should not rely on the Letter of Intent as binding on the other party as it is only a tool to facilitate further discussion. The Letter of Intent can also be used in discussions with bankers and investors as evidence of serious negotiation.