(Four Minutes Read)


Let me give it to you straight, any document which is headed subject to Contract , conditional acceptance, Letter of Intent needs to be treated with caution.

The use of these words do not generally constitute a binding contract. Letters of intent, subject to contract, conditional acceptance are documents used by parties in negotiation, used to begin the process of putting down the details and parameters of their proposed contractual relationship without actually fully binding the parties. These terms can be used in any contractual dealing ranging from rent agreement, Lease, contract of sales of goods e.t.c.

A lot of business, startups and individuals have innocently been shafted and  fall prey to the cold calculated use of these legal terms; and hard earned money wasted down the drain.

Caution: These terms might be binding if the court denotes that the parties have the intention to hold it has binding irrespective of the terms. The use of these legal terms do not carry an automatic wand of bindingnes anywhere it's used. Where it is established that the intention to make it binding by the parties, and other element of contract are present then the contract my be interpreted as binding.

These legal languages used to evade commitment comes in different shades and varieties. Words such as "Tentative Agreement Without. Engagement", "Subject To Contract", "Provisional Agreement; all of these terms no matter our coated are words used to dodge liabilities like bullet.

It is good practice to ensure that when drafting such legal terms it must not be used along with pervasive or ambiguous words.

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