Are letters of intent binding?

Many people in the community who lost homes in Coffey Park, Fountaingrove, Mark West Springs, Wikiup and elsewhere are continuing to work on rebuilding their homes.  Builders sometimes ask people to sign a letter of intent as part of this process.  The builder may want you to sign a letter of intent to show that you are serious about working with them.

Is a letter of intent nonbinding ?  It may surprise you to hear that a letter of intent can sometimes be binding.  That would be unusual, and it would probably happen when there is a lot of detail in the letter of intent about what the parties are agreeing to.  Even if a letter of intent is not fully binding, moreover, you may be required  to negotiate in good faith before stating that you don’t want to go forward and sign a contract.

You should read carefully any letter of intent you are asked to sign.   If it contains language stating that it is “nonbinding” and that the parties have many details to work out before signing a binding contract, you are in a better position.  But even if the letter of intent is not binding, you should probably not sign it if you are not serious about working with that builder.  Each case is different, of course, so I cannot give an opinion about a particular letter of intent without reading it and getting a lot of background information.

By |2018-02-27T14:18:54+00:00February 27th, 2018|Uncategorized|