CIPS Legal Aspects - Assignment Two Essay Example | Topics and Well Written Essays - 3000 words

CIPS Legal Aspects - Assignment Two - Essay Example The letter of intent sent out by QSC may not initially be binding upon the parties in their entirety. However, it could be interpreted as binding on the parties if it closely resembles a contract. The letter of intent in this case has clearly specified that the binding terms of the contract would be QSC’s and the formal contract prepared by the procurement team is also in accordance with QSC’s terms. Letters of intent have traditionally been held to be non binding. For example, in the case of Turiff Construction Ltd v Regalia Knitting Mills Ltd2 it was held that a letter of intent will have two characteristics (a) it will express the intent to enter into a contract in the future and (b) it will itself create no liability in reference to the future contract. This would at the outset, suggest that QSC’s letter of intent specifying that its own contractual terms will prevail, may not have binding force. But in the Turniff Construction case, the Court nevertheless up held the contractual obligations associated with the letter of intent, on the basis of the facts in the case. In the case of British Steel Corporation v Cleveland Bridge and Engineering Co Ltd3, while it was held that while no contract was created based on the letter of intent itself, liability was nevertheless imposed. The Court in this instance pointed out that both the parties had expected a formal contract to eventuate, therefore work commenced after the issue of the letter of intent - if followed by a contract - â€Å"will be treated as having been performed under that contract.†4 This was also affirmed by Neill LJ in Monk Construction Ltd v Norwich Union Life Assurance Society5, in making a general statement that a contract may come into existence following a letter of intent, depending upon the individual circumstances of the case. According to HH Judge Thornton in A.C. Controls v British Broadcasting Corporation, â€Å"in construing and giving effect to a letter of intent,