A famous example often cited by legal scholars, was a case involving the Getty Oil and Pennzoil in very early 1984. The parties had signed a "Memorandum of Agreement" _ viewed by the parties at the time as a Letter of Intent _ for a complex investment and stock transaction, whereby Pennzoil would purchase Getty Oil stock, and set forth general terms of the investment that had been reached in conversations, and also stipulated that the Memorandum was subject to the approval of the Board of Getty Oil. The Board of Getty Oil sooner approved the transaction and both parties announced on January 4, 1984 in a press release, an "agreement in principle" to the terms of the Memorandum. The final agreements for the merging of Texaco and Getty Oil were signed by the parties on January 6 _ 8.
The point is that the often_heard notion and claims by some sellers or their overzealous agents and brokers that the use of the LOI to initiate a purchasing proposal by a buyer "is how it is usually done and this is how it should be," may be applicable and prudent only in the minds, the imagination, and hopes or dreams of those sellers, especially the more marginal ones and their brokers and agents who operate on the fringes largely on the Internet. It is NOT a view that is shared by the broad spectrum of credible buyers, more especially when the "sellers" involved are largely unknown and obscure operators.