Letter of Intent, is it legally binding? Letter of Intent, is it legally binding?
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  1. #1

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    Default Letter of Intent, is it legally binding?

    Hi all,

    Just decided to ask you for opinions as I am a beginner when it comes to legal agreements and everything.

    I've been negotiation very briefly with company which is going to offer their services for big organization. They are looking for contractors who would do the work in case their offer is accepted.

    Now everything is quite clear so far, but they would like me to sign letter of intent, stating that:

    "I, the undersigned, XXX, working as a freelancer, hereby declare to accept to work for XXX in the framework XXX.

    In case XXX proposes my CV to provide XXX services, either in a Time and Means context or in the context of a fixed-cost service contract, and the proposal is accepted by the XXX, I fully commit to comply with all the rules applicable to the contract."

    Should I sign this, what do you think? Reading letter to letter, this would bind me to work in any country for any rate for any period of time, which would be, of course, insane. However, this is labeled as "letter of intent" so I assume this is not legally binding (I do not know this stuff well enough!), only morally and I can sign this without worries? And if there would be job opportunity suitable for me, I would then start to negotiate over exact terms, like daily rate, right (I have already told them my rate requirements so they know it)?

    Am I correct? Of course I understand, that if I sign this, I will signal that I am genuinely interested in working for this company even if it's not legally binding. Which I am, if we can agree over the rate and everything. But if they cannot pay enough or something else like that, I can reject the offer?

    So should I sign this, what do you think?

    Thanks!

  2. #2

    I Am Legend


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    Sounds like a zero hour contract to me. Personally I would say no.

  3. #3

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    eek's Avatar
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    That reads like you are committing to the contract if they win it. Personally I wouldn't go near it as they could spend ages deciding by which time another contract would have appeared
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  4. #4

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    Quote Originally Posted by eek View Post
    That reads like you are committing to the contract if they win it. Personally I wouldn't go near it as they could spend ages deciding by which time another contract would have appeared
    WES

    Don't sign it in any shape or form.
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  5. #5

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    Yes a letter of intent legally binds you, as others say probably best stay clear. If you agree to it you want to make sure the rates are set and the scope of work is agreed before you sign it. This does sound like "carte blanche". As a real business it's quite good to have a letter of intent and fixed price contracts, but you do need to know the scope of the work.
    Last edited by BlasterBates; 25th August 2013 at 10:28.
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  6. #6

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    Ok, people seem to be quite sure about this so I will skip this one. Or I will first propose changes to this letter of intent (rate, scope, etc.) and see what they say.

    I was betting that this kind of signed letter of intents are not binding as they lack required information like rate, dates, even country (they are offering people for multinational client) and everything. But then again, even if it would not be binding, why to risk it...

    Thanks for advices!

  7. #7

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    That basically says you agree to agree to anything in the future, which I can't imagine would be binding. But don't take the risk.
    Will work inside IR35. Or for food.

  8. #8

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    Quote Originally Posted by VectraMan View Post
    That basically says you agree to agree to anything in the future, which I can't imagine would be binding. But don't take the risk.
    I'm inclined to agree with that. Though, if the letter doesn't mention any payment then I can't see how it could be binding. Sounds a bit like the usual agency bulltulip that they will try and bully you with later so take legal advice.

    Also make sure that you don't ever enter into a contract personally - it is always your company which enters into the contract.
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