Best Trade Solution

WHY LOI-LETTER OF INTENT NEEDED?
BENEFICIARY IS ASKING APPLICANT FOR SIGNING AN LOI THOUGH THEY ARE DOING IMPORT BUSINESS THROUGH LETTER OF CREDIT. IS THE APPLICANT OR BUYER IS BOUND TO SIGN THAT LOI? WHAT CARE SHOULD BE TAKEN IN THIS REGARD.

Hi Pal,

IMHO, Letter of intent is a pre-contractual agreement, probably concerning delivery of goods, Types, and payment terms where a letter of credit is cited. Letter of intent may serve to obtain credit facility, authorization to export/import.
That will depend on the Countries Trade structure.
Other comments appreciated
Ciao

In my opinion, the letter of intent provides a framework for negotiations to ensure that the parties try to reach an agreement by doing everything possible, in good faith, but without necessarily concluding. It does not commit the parties to the formal conclusion of a contract. It is therefore different from a contract offer or memorandum of understanding. However, depending on the way it is written, it can be binding, it is necessary to respect some rules. The letter of intent expresses the will to carry out the discussions as well as possible.