Group: 17. 71 Student: Mirzayeva Muxtasarxon What Is the Statement of Intent?

Levels of Commitment

The biggest difference between a letter of intent and a letter of commitment is the level of involvement expressed by each document. A letter of intent is not a legally binding document whereas a letter of commitment is a negotiated document binding an individual and an employer or other entity. There are legal consequences to breaking a letter of commitment but there are none with a letter of intent. A letter of intent starts the negotiation process but does not set forth agreed-upon conditions for the relationship.

Time Frame

A letter of intent usually is in force between two parties for only a relatively short time, perhaps 30 to 45 days. After that period, the parties will have to renegotiate new terms to be considered in a possible contract. By contrast, a letter of commitment is a legally binding contract that lasts for the duration of time as set forth in the document. This is typically a set of number of years or until a certain project is completed.