![]() It is well-established that Michigan and other jurisdictions follow the modern trend in law that favors carrying out the parties’ intentions through enforcement of contracts and disfavors, holding them unenforceable because of uncertainty. THE ENFORCEABILITY OF CONTRACTS IN GENERAL Letters of intent have been characterized by at least one practitioner as ‘an invention of the devil.'" 1 According to one authority, "ecause of their susceptibility to unexpected interpretations. Of course, too much assurance may have the effect of creating a binding agreement. Many times the parties will insist on such a preliminary document after an agreement in principle has been reached to justify, in part, the time and expense involved in drafting the transaction documents and in performing due diligence activities. Such purposes can include maintaining confidentiality and exclusivity to preclude one or both parties from dealing with others during the pendency of final negotiations and due diligence. In most situations, these documents are not intended to bind either party to finally complete the contemplated transaction and are used for a variety of purposes. A letter of intent, memorandum of understanding, or other "preliminary" document often precedes a transaction. ![]()
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