The New York Law Journal
By Jack Malley

It is customary for parties who are negotiating a commercial real estate lease to set forth terms of a potential lease agreement in a non-binding letter of intent (LOI). However, when a broker or lawyer prepares an LOI that includes material terms, and fails to include specific language reserving the parties’ right to walk away from a deal, the LOI may be enforceable. In this article, we define the term “letter of intent” with respect to a commercial lease, set forth the general law as to when terms within LOIs are, and are not, binding, and present decisions on their enforceability to provide guidance to drafters of these documents.