Question

Ryan sends Michael a letter of intent for the purchase of a tract of land. The letter of intent outlines the purchase price, the legal description, and the financing terms. A paragraph is included that states that the letter of intent is a non-binding agreement, and is an offer to enter into negotiations.

Answer 1

Answer:

B) The letter of intent is an invitation to negotiate, which is not an offer.

Explanation:

A letter of intent is simply an invitation to negotiate any type of transaction, sales or lease. The amounts included in the letter can serve as a basis for the negotiating or bargaining process, but they are not fixed and even Ryan can change them. This is similar to an ad in a newspaper that offers something for sale. Until the bargaining process is over and both parties agree on the consideration exchange and other terms, it is just a notice without any legal value.