LEGALLY PARKED
LETTERS OF INTENT
Devil
Claudia Gerrard investigates the importance of letters of intent in the parking industry
A letter of intent can cover a wide range of
different subject matters, depending on the particular circumstances
IN THE DETAIL I
n previous articles, we looked at how to form a legally binding contract and the need to make sure you get it right.
However, a recent real-life scenario shows that one aspect of the law, letters of intent, are still largely misunderstood and misused. In a recent case, a client in the parking
industry wanted to employ a new contractor – and, inevitably, he wanted to make sure that the contractor would provide the required services. Equally importantly, those services had to be provided at the price the parties had discussed during the negotiations.
The client decided to draw up a letter of intent. Letters of intent have been the subject of numerous court cases, mostly within the construction industry. But their application is much wider and relevant to a wide range of industries.
Top10tips Letters of intent
1. Use with caution As an initial starting point, consider whether a letter of intent is really necessary. Think about its purpose and aim, and whether the same effect can be achieved by other means.
ABOUT the AUTHOR:
Claudia Gerrard is a legal consultant specialising in
parking, security and leasing law.
20 AUGUST 2012
2. Make sure a contract is not formed inadvertently As with earlier articles, consider if there is offer and acceptance, certainty of terms, consideration (price/payment) and an
intention to create legal relations. If so, you may create a contract, not a letter of intent.
3. Keep it simple The more detailed the letter, the more likely it will become a contract. Don’t include more information than is absolutely necessary.
4. Include any areas that are still subject to negotiation Mention any matters that the parties are still discussing. In particular, identify any pricing issues or service provision issues that still need to be fi nalised.
5. Refer to a formal contract Make it clear that the parties intend to enter
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