The pitfalls associated with Letters of Intent

Outlining the basic terms of a real estate transaction in a letter of intent can help prevent future disagreements between parties — it can also lead to them. When this type of document is incomplete, self-contradicting, or up for interpretation, problems often arise. The most significant is confusion as to whether the letter is binding or non-binding. While one party may see the document as a simple guideline designed to build momentum towards a final deal, the other party may believe the terms in a letter of intent are set in stone.