Should you use Letter of Demand & Letter of Intent templates rather than a commercial lawyer?
Letter of Intent & Letter of Demand legal templates
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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
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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