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Letters Of Intent

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Chapter Summary

During the prolonged gestation of parties' agreements, the negotiators often feel the need to create a series of preparatory documents. The frequency of their use in practice has led to the common use of their abbreviations such as &t;L/I&t; (letter of intent), &t;MoU&t; (memorandum of understanding) or LoU (letter of understanding). This chapter investigates the legal effect of such documents and offers advice to potential drafters. It provides reference to legal systems, in particular to American, Dutch, German, Italian and Swiss law, as well as to uniform law. The chapter first presents a variety of positive situations, the assembled documentation in the form of various cases. It then formulates a theoretical synthesis of the nature and legal effect of letters of intent. This report will offer practical recommendations to negotiators.

Keywords: legal considerations; letters of intent; negotiators

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