A letter of intent is a letter from one company to another acknowledging a willingness and ability to do business. It is often used as acknowledgement of the fact that a merger between companies or an acquisition is being considered seriously.
A letter of comfort is in no way guarantees the loans approval for the subsidiary companies. It merely gives reassurance to the lending institution that the parent company is aware and approves of the situation.
This is important as we are doing commercial contracts. A letter of intent is not intention to create legal relations.
British Steel Corporation v Cleveland Bridge and Engineering Co Ltd 1984.
Also a letter of comfort is not intention to create legal relations.Kleinwort Benson Ltd v Malaysia Mining Corporation1988.
http://www.investorwords.com/2775/letter_of_intent.html
http://www.investopedia.com/terms/l/letterofcomfort.asp
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