Law of Contracts- notes [DOCUMENT TITLE]

Law of Contracts

Letters of Intent:A letter of intent merely indicates a party’s intention to enter into a
contract on the lines suggested in the letter.It may become a preclude to the
contract.However, where a letter stated that it would be followed by a detailed purchase
order which carried an arbitration clause , it was held that the letter was not a supply order
and the arbitration clause contained in it did not by itself fructify into an arbitration
agreement.1

1
Dresser Rand S.A v Bindal Agro chemical ltd(2006) 1 SCC 871, relying upon Rajasthan Coop Dairy Federation
Ltd v Maha Lakshmi Mingrate Marketing Service(P) Ltd, 1996 10 SCC 405