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 Letter of Intent is a non_binding document of inquiry, stating one's interest and intent. The more appropriate document for an Importer to use when initiating contact with an Exporter or supplier is an RFQ _ Request for Quotation. Many brokers and new traders believe that the LOI establishes some sort of firm inquiry, nothing can be further from the truth. There is absolutely nothing binding whatsoever about an Letter of Intent because all that it does is to establishes an intention _ for example, I can sit down and write a letter of intent to buy the empire state building and it would be, utterly non binding.