I am interested in knowing the legal value of LOI and Offer letter. How and when is it in compliance and becomes a contract and what if the joining after the offer letter is delayed or cancelled.
From India, Jaipur
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3From India, Jaipur
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Dear Abhishek,
LOI and offer letter have the same value and assume a legally binding nature when accepted unconditionally. An LOI is only an offer; to make it binding on the offeror (the one making the offer), it needs to be accepted. The offer and acceptance must be made by consenting adults with a sound mind, and the subject of the offer must be legally valid. In other words, it must not be illegal. For example, there cannot be a valid agreement to assault someone. Additionally, there must be consideration; if X has agreed to do some work for Y, there must be an agreed-upon consideration (price) for it. Without such consideration or mutual obligation, there will be no binding contract.
Therefore, once the offer letter is accepted, it becomes a binding contract. If the joining is delayed by the offeror while acting on it, there is a breach of contract, and one is entitled to damages and compensation thereof.
From India, Mumbai
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LOI and offer letter have the same value and assume a legally binding nature when accepted unconditionally. An LOI is only an offer; to make it binding on the offeror (the one making the offer), it needs to be accepted. The offer and acceptance must be made by consenting adults with a sound mind, and the subject of the offer must be legally valid. In other words, it must not be illegal. For example, there cannot be a valid agreement to assault someone. Additionally, there must be consideration; if X has agreed to do some work for Y, there must be an agreed-upon consideration (price) for it. Without such consideration or mutual obligation, there will be no binding contract.
Therefore, once the offer letter is accepted, it becomes a binding contract. If the joining is delayed by the offeror while acting on it, there is a breach of contract, and one is entitled to damages and compensation thereof.
From India, Mumbai
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