If guided by the provisions of Art. 421 of the Civil Code of the Russian Federation, such a civil law document as an agreement of intent can be classified as an unnamed contract. It differs from the preliminary contract in the absence of clearly spelled out essential conditions.
Characteristics of an agreement of intent
Since, according to the Civil Code of the Russian Federation, citizens and legal entities are free to conclude contracts in any form, an agreement of intent does not contradict the law and, although in essence it is very similar to a preliminary contract, it is not at all. It only prescribes the will of the parties to conclude any transaction in the future or to jointly engage in this or that type of activity. As a rule, no specific dates are indicated in it.
In addition, the agreement of intent does not provide for any clearly stipulated obligations of the parties in relation to each other and to the terms of this document, there is no detailing of the processes of cooperation declared in the document. It does not provide for sanctions for violation of the conditions, there is no list of force majeure circumstances. It is drawn up rather not as a legal act, but as a declaration that officially fixes the goodwill of the parties and demonstrates their interest in each other.
Why do you need to sign a letter of intent
Usually, such a document precedes the conclusion of especially large transactions and allows you to achieve several goals. Firstly, in this document, to one degree or another, it is possible to fix certain agreements reached by the parties in a preliminary manner, to exclude options that both parties consider unacceptable, or to include those points on which there are no disagreements. In the letter of intent, you can reflect the pre-established price range, agree on the terms of delivery, negotiate the circumstances that will cause further negotiations.
Secondly, the agreement of intent is representative in nature and has a psychological impact on the parties to the negotiation process. This document, which has no legal consequences, is what in the old days was called a "merchant's word" - a kind of reputation deal, a deal of prestige. Refusal to comply with the conditions prescribed in this agreement can be challenged by means of an unspoken appeal to a third party, for example, an investor, a business owner. Such actions always become known in business circles, reducing the degree of confidence in the party that has neglected the previously reached agreements. Therefore, the agreement of intent is quite a significant and viable document that has the right to fix civil law agreements.
