Business Law – Term Sheet or Letter of Intent.
The Term Sheet or Letter of Intent states specifically that it is not a binding agreement and is subject to the parties turning it into a formal binding agreement. This does not mean that it should not be reviewed by an experienced attorney. There are many cases which held that the parties were bound, even though the document stated that it was a non-binding agreement. You may not be able to just back out of such an agreement. Are you obligated to negotiate and, if so, negotiate in good faith? If you do not negotiate in good faith, are you subject to possible liability? These are among many reasons why a Term Sheet or Letter of Intent should be reviewed by an experienced attorney.
By: Ronald Glazer