Are you interested in participating in our dialogue with WRA on the status and future of LOI for commercial practitioners in Wisconsin? Please contact Tracy Johnson for more information and to be included in our working group. Conference call / In-person meeting dates to be determined.
LOI – Letters of Intent (from WRA, 11.12)
In commercial transactions, an LOI is an invaluable tool, a negotiation instrument used to determine if parties agree on key aspects of a possible deal. The use of an LOI greatly reduces the premature drafting of offers or leases, because it’s an opportunity to see if the parties can even agree on the most basic business and economic issues without an intention to be bound.
While the majority of LOIs successfully open the door for the parties to negotiate and often conclude in consummating a commercial offer to purchase or lease, there is a danger to this method — the more the LOI looks like a contract, the greater possibility a court may determine it is a contract. And while it is commonplace for a commercial agent to assist parties in preliminary negotiations by way of an LOI, the practitioner is strongly encouraged to utilize an LOI drafted by an attorney.