Logistics and Supply Chain

Running head: SUPPLY CHAIN
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Logistics and supply chain
Student’s name
Name of the institution
Date

SUPPLY CHAIN
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A letter of intent can also be referred to as a term-sheet or memorandum of
understanding. It's a written document stating an agreement between parties which they all intend
to solemnize through a legal binding contract. It cannot be enforced by law because the parties
are not engaged in a deal, nevertheless, it indicates a commitment of one party to the other. By
concluding their negotiations with a letter of intent, Semicontronics and Singatron have an
understanding where singatron is committed to supplying semicontronics with the specified
products by in case they don't fulfill their agreement. Law cannot enforce it because they are no
binding contract.
What parties can do to limit the responsibilities to the relations of the Letter-of-Intent?
To limit their responsibilities, involved parties can choose to be careful with the language
used in the LOI or state in their letter that there are no liabilities in case of a breached agreement.
Parties should be cautious while witting an LOI to avoid a contract-like language, words such as
will, must and shall not be, consistent use of shows that the parties have a binding contract and
not just an agreement to discuss in good faith. To ensure that the LOI is not a binding contract, a
word such as possible deal, would, potential transaction, or any other terms that do not show
commitment should be used. The involved parties could also state in their LOI that in case the
agreement is breached there will be no damages to be paid (Ladd, 2017).
Internal analysis of semicontronics.
Strengths:
 Excellent reputation- the company has a good reputation for producing quality products,
meeting the expectations of their customers, and delivering on the right time. This has
enabled customers to build trust and become loyal customers (Búzás, 2017).