Clients like letters of intent. Letters of intent can be developed easily and shipped out quickly to get a deal rolling. They can lay out basic terms of a deal in laymen’s language, and in just a few pages, so the parties can decide if they are generally on the same page. They can even be used to create certain obligations, say a no-shop provision, giving a buyer some comfort that it will not have the rug pulled out from under it before it can cut a deal.
Lawyers like letters of intent, too. Really. Like clients, we view them as useful tools, perfect for putting the basics parameters of a deal in front of both sides, and ensuring that there is some accord on the most important terms. They can also be used to entice important details from the parties: information concerning the property, the security, timing, due diligence, financial covenants, costs, etc., which the parties might otherwise not tend to focus on up front, but which are important foundations for the transaction and some of which can become major sticking points.
