Letter of Intent & Letter of Demand legal templates

It must be a little frustrating to be a commercial lawyer these days. With so many free online databases, templates and other resources - a lot of legal work can and is being done by non-lawyers. But is this wise?

Many thousands of online searches are done per month for "Letter of Intent" templates and samples. I wonder if the people searching for these appreciate the risk of Do It Yourself law (DIY law)?

Using online legal templates such as a Letter of Intent, Heads of Agreement, or a Letter of Demand may seem like a cheap option. It is if you are experienced.

What are the issues which an inexperienced non-lawyer might fail to appreciate?

Every template needs some customisation, even if that be to populate blank fields with appropriate names and details. Turning to more complex data processing, how do non-lawyers decide what sentences or clauses to delete? Even more complex, how do non-lawyers decide what's missing from a template to suit their circumstances and what wording to use to add provisions?

I get it - I really do - everyone wants the best job, fast, and for the cheapest price, and initially a legal fee for a customised Letter of Demand or a Letter of Intent may seem steep. But tell that to the businesses which have their demand letters ignored or which find themselves in a legal no-man's-land because their letter of intent did not cover all bases before setting a price, delivery date or scope of work.

Longman's dictionary defines no-man's land as: "an area of land that no one owns or controls, especially an area between two borders or opposing armies". That perfectly describes a typical commercial or IP law court case and a potential problem of DIY law.

A current court case over brand names and trade marks provides a specific example of the problem of do-it-yourself law. It's the ongoing case of Organic Marketing Australia Pty Ltd v Woolworths Pty Ltd. Had Organic maintained an ongoing relationship with an experienced commercial and IP lawyer since it first registered its logo trademark in 2004, it probably wouldn’t be in the legal mess it finds itself in with Woolworths as its opponent today. Even a non-lawyer such as myself can see that Organic's legal position is weakened by its DIY law approach to brand registration and protection.

For $2,000 paid to an experienced lawyer in 2004, Organic could have avoided its legal mess in 2011 that eats at its bottom line and management time.

Anyway, getting back to legal templates, I guess "the average Joe" in need of legal documentation would look at things this way:

1. If it is a short document, I can do it myself
2. If it does not look like or seem to be a legal document, I can do it myself
3. If it seems to have little risk involved with it, I can do it myself
4. If it is something done before a lawyer is ordinarily involved, I can do it myself
5. If it is about negotiating something, I can do it myself

All 5 points may be a correct position, BUT, perhaps to their detriment, the following assumptions are made by non-lawyers:

* I know how to write clearly
* I know enough about law to recognise non-legal content
* I know enough about business to avoid any risk in engaging with a legal process or document
* Business lawyers don't know about business, they know about law
* Lawyers know about court work, they can't add much value at the negotiation stage of a deal

The fact is each of these assumptions could be gravely wrong. These assumptions can come back to haunt business owners when they are threaded into business activity, correspondence or communication which can become VERY legal once it lands on a lawyers desk days, weeks, months or years later.

My personal experience is in the past two years, my IP Attorney, Noric Dilanchian, has sent out on my behalf four letters of demand - each one has been successful and fully complied with - not just to my satisfaction, but indeed each of the demands (or remedies) listed in each letter.

I guess it depends on how much you value your business success, and your legal rights - as well as covering your legal butt in the future.

If you are looking for a Letter of Intent or a Letter of Demand, AT LEAST speak with a qualified and experienced business lawyer first.

What is the purpose of a Letter of Intent?

A letter of intent can be used to:

• test that ongoing negotiations are based on a real intent to proceed;
• confirm a foreshadowed transaction in writing; or
• clarify key points before more costly or complex work is done.

As an alternative to a Letter of Intent, the parties may prepare a Memorandum of Understanding (MOU), Term Sheet, Deal Points Letter or Discussion Paper. Each alternative has different characteristics. A common feature of them all and of a Letter of Intent is that usually no legally binding consequences are put in place by the document. Typically they are preliminary to a contract or other full legally binding transaction documents or procedures.

What is a Letter of Demand?

A Letter Of Demand is a letter stating a legal claim. Typically it has three parts - a statement of facts (eg I gave you $100), a statement giving a legal interpretation of those facts (it was a loan, not a gift or down payment), and a statement of the required legal remedies or demand (eg you must pay back in 7 days or I'll sue). A Letter of Demand is used for a myriad of purposes, including debt collection and claiming trademark or copyright infringement.

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At justweb^®, we use and recommend the services of:

Dilanchian Lawyers & Consultants
The University Centre, 210 Clarence Street
Sydney NSW 2000 Australia
Tel (02) 9269 0229
Email Noric Dilanchian
Web www.dilanchian.com.au

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