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LOI is fraught with many legal booby traps & pitfalls especially for the buyer. But probably the most damning reason why credible crude buyers would have little or no use for LOI in their buying dealings, is that using the LOI is fraught with many incalculable legal traps and pitfalls much of which could atimes be very costly for, and to the detriment of, the buyer, according to legal authorities and contract law experts.

The LOI as it is now used is a misunderstood application of poorly informed brokers and traders. A more proper application based on established custom and practice in International trade, going back even to the old medieval "Law Merchant" (Lex Mercantilis) is: Buyer requests a quotation _ in modern usage this is an RFQ/Request For Quotation _ NOT an LOI. Seller may then reply with a Quote. Buyer confirms receipt of quoted prices, and requests an Offer.

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