"Parties to a transaction sometimes intentionally create a letter of intent as an expression of what they intend to agree upon should certain circumstances arise... [whatever happens], the document will not be binding and thus not enforceable until those circumstances arise. Thus, the letter of intent is essentially a legally worthless document. It is not clear to me the reason any party would ever bother to create such a document and yet I have seen it used on many occasions. If parties to a transaction intend to bind each other, then they should create a binding contract, not a letter of intent. If the parties to a transaction do not intend to bind each other, then why bother creating a document that is not binding?
Lawyers at the Coollawyer.com, explain the legal "paradox" inherent in the LOI, wherein the signing of an LOI, is often prone, not to bringing about less litigation, but more litigation, and put it this way: