Nonbinding Letter of Intent Not Equal to Contract

May 21, 2009
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Facts: A large retail bank approached an owner about leasing space so that it could open a branch. After several discussions and an assessment of the premises, the bank determined that the premises would not be suitable for its design. As a result, the bank sought and found suitable space to the west of the premises.

After securing the suitable space, the bank went back to the owner of the premises and signed a nonbinding letter of intent (LOI), meaning that it would not be bound by the terms agreed to during negotiations until there was a signed lease.

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