Question

Ryan sends Michael a letter of intent for the purchase of a tract of land. The letter of intent outlines the purchase price, the legal description, and the financing terms. A paragraph is included that states this is a non-binding agreement, and is an offer to enter into negotiations.

a) The letter of intent is an offer that may be accepted by Michael.
b) The letter of intent is an invitation to negotiate, which is not an offer.
c) The letter of intent is an expression of opinion, and does not indicate an intention to enter into a binding agreement.

Answer 1

Answer:

The answer is: B) The letter of intent is an invitation to negotiate, which is not an offer.

Explanation:

A Letter of Intent (LOI) can be defined as "an agreement to agree". It is not a contract, it´s not binding and can not be enforced. It basically shows the commitment one party has to negotiate with the other party. A LOI is the starting point for a negotiation.

Answer 2

Answer:

B) The letter of intent is an invitation to negotiate, which is not an offer.

Explanation: