Letters of Intent - Their General Characteristics and Differentiations  Cover Image
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Писма за намеренията — обща характеристика и някои разграничения
Letters of Intent - Their General Characteristics and Differentiations

Author(s): Krassen Stoichev
Subject(s): Law, Constitution, Jurisprudence
Published by: Институт за държавата и правото - Българска академия на науките

Summary/Abstract: Agreements between parties concerning their behavior in conducting negotiations and formation of contract can have legal effect if the parties have an intention to make a legal relationship. This assumption is in conformity with the idea of freedom of contract, which underlies the entire contract law. This explains why the doctrine insists on the view that an agreement, which introduces a requirement of form that a contract be made, or agreements for stage-by-stage formation of contract, have the features of valid contract. Letters of intent function as a type of such agreements with legal effect. Bulgarian civil law establishes the general requirement in the process of negotiations and formation of contract that parties should act in good faith, otherwise they pay damages. As a result letters of intent cannot exclude or limit the requirement of good faith and they will always deal with it in one form or another. Letters of intent can be composed so as not to have legal effect. But that does not mean that the law loses its interest in them. The fact that the parties have decided not to establish legal relationship will not deprive them from legal protection, if their interest deserves legal protection. It shall be achieved on some extra-contractual basis. Letters of intent that have legal effect and preliminary contracts are different legal figures. The latter must contain all necessary elements of the future contract, the former concerns the behavior of the parties conducting negotiations and forming contract. What is more, there are differences between letters of intent with legal effect and preparatory contracts for formation of company or frame contracts.

  • Issue Year: XLVI/2005
  • Issue No: 2
  • Page Range: 35-52
  • Page Count: 18
  • Language: Bulgarian