A ‘letter of intent’ merely indicates a party’s intention to enter into a contract in future. No binding relationship between parties at this stage emerges and totality of circumstances have to be considered in each case. It is no doubt possible to construe a ‘letter of intent’ as a binding contract if such an intention is evident from its terms. But then, intention to do so must be clear and unambiguous as it takes a deviation from how normally a ‘letter of intent’ has to be understood.

Jawahar Lal Burman v. Union of India, (1962) 3 SCR 769 and Dresser Rand S.A. v. Bindal Agro Chem Ltd., (2006) 1 SCC 751, if one may say so, are not directly supporting either of the parties.

– Hon’ble Justice Sanjay Kishan Kaul, South Eastern Coalfields Ltd. v. M/s. S. Kumar’s Associates AKM (JV), [Civil Appeal No. 4358 of 2016].

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A ‘letter of intent’ creates no vested right until it passes the threshold of final and unconditional acceptance. It is but a ‘promise in embryo’, capable of maturing into a contract only upon satisfaction of stipulated preconditions or upon issue of a ‘letter of acceptance’. A bidder’s expectation that such a contract will follow may be commercially genuine, but it is not a juridical entitlement. To hold otherwise would be to bind State in contract before it has consciously chosen to be bound.

– Hon’ble Chief Justice of India, Hon’ble Justice Surya Kant, State of Himachal Pradesh v. M/s. OASYS Cybernatics Pvt. Ltd., [Special Leave Petition (Civil) No. 6531 of 2025] decided on 25.11.2025.