Research On The Legal Issues Of Letter Of Intent

The Contract Law protects freedom of contract and legitimate rights and interests of parties involved.Meanwhile,it helps maintain social and economic order.By summarizing and analyzing the judicial adjudication information and relevant judicial policies,the author finds that the letter of intent,a tool for civil subjects to show their intentions,can be divided into three legal documents of different natures and with different legal effects based on differences of internal elements.They are intentional agreement,contract,and preliminary contract,respectively.In judicial practice,the legal issues of letter of intent mainly revolve around definition of different legal natures as well as liabilities for breach of the letter of intent and the corresponding relief approaches.However,the adjudication results show that the trial of the court of different levels follows diverse ways of thinking.This leads to unpredictability of adjudication results and difficulty in guaranteeing legitimate rights and interests of civil subjects.Therefore,one of the top priorities is to underpin a set of standards and provide reasonable and scientific references for judicial adjudication.This can bring positive guidance to juristic act of civil subjects.Exploration of the issues of the legal issues of the letter of intent should be based on the theory of juristic act.Juristic act is an act of involved parties which establishes,changes and terminates the civil legal relationship through declaration of intention.Unified judgment rules and objective judgment standards have been set by law to judge establishment and commencement of various juristic acts.The corresponding conditions for establishment and commencement of certain juristic act can be identified through examination of the content of the letter of intent in specific disputes.On that basis,the nature and the legal effect of the letter of intent can be confirmed.After that,research methods,including empirical analysis,legal interpretation,document research,economic analysis and interest balancing,are comprehensively employed to come up with an effective way of judging to address legal issues of the letter of intent.The general establishment condition of juristic act,namely whether the letter of intent should be fully equipped with the elements of declaration of intention,is examined.The letter of intent not equipped with relevant elements is an unbinding intentional agreement.The law protects the reasonable reliance interest of involved parties through the theory of liability for contracting fault.Then,through the study of the letter of intent with the elements of declaration of intention.The special conditions for establishment of a specific juristic act are clarified.The letter of intent as an intentional agreement and a contract is distinguished from each other.The remedy for breach of these two kinds of the letter of intent is discussed.According to legal regulations and the theory of law of obligation in China,the establishment of a preliminary contract comes along with the right to request conclusion of a contract.The liability for breach of a preliminary contract includes the liability of deposit or liquidated damages,continuing to perform the contract and compensation for damage.The scope of compensation for damage should cover losses of the reliance interest and losses of the opportunity interest.