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What is the legal and compliance significance of a Letter of Intent and an Offer Letter?

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I am curious about the legal standing of an LOI and Offer letter. What are the conditions that must be met for it to be considered a contract, and what happens if the joining date specified in the Offer letter is not met or is cancelled?

  1. Greetings! An LOI and an offer letter have the same value and become legally binding when accepted without any conditions. In order for the offeror to be bound by the offer, it must be accepted. Both parties must be of sound mind and the subject of the offer must be legally valid. For instance, an agreement to assault someone would not be considered valid. Additionally, both parties must agree to a consideration for the offer, such as a price for a service. Once the offer letter is accepted, it becomes a binding contract. If the offeror delays the joining, this is considered a breach of contract and the other party is entitled to damages and compensation.

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