Legal Memorandum: Letter of Intent in AL

Issue: Whether a Letter of Intent Did May Modify or Supersede a ‘Handshake’ Agreement in Alabama.

Area of Law: Business Organizations & Contracts
Keywords: Letter of Intent; "Mutually exclusive" theory
Jurisdiction: Alabama
Cited Cases: 492 So. 2d 998; 77 F.3d 309
Cited Statutes: None
Date: 11/01/2000

A subsequent document which imposes no obligation lacks the mutual assent necessary to modify an earlier agreement.  Holland v. Continental Tel. Co., 492 So. 2d 998, 999 (Ala. 1986).  Parties frequently have multiple documents each of which deal with a certain subject matter or transaction.  Some of those documents are part of the contract or comprise the contract and are binding, and others are not part of the contract and are not binding.  The fact that some documents are binding while others are not does not make them “mutually exclusive” or doom one set or the other to nonexistence.  See also Rennick v. O.P.T.I.O.N. Care, Inc., 77 F.3d 309 (9th Cir. 1996). However, Rennick provides no support whatsoever for a “mutually exclusive” theory, either.


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