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Letter of Intent - The Abuse

Guest post by: Silvan Pillay

Article Overview: The letter of intent was once a sought after prelim agreement in the transport industry in South Africa. Today it is simply ignored bue the aboue. This article explains the Letter of Intent and its legal standing today.

Letter of Intent - The Abuse

Simply defined, a "letter of intent" or LOI is a document outlining an agreement between two or more parties before the agreement is finalised. A few years ago, this was a sought after document. Today too many "fly by nights" in the transport industry are abusing this concept.

Afritransport receives about 20 letters of intent every week - What do we do? ABSOLUTELY NOTHING. It has become a meaningless document. When we receive an LOI in our email inbox - we hit DELETE!

It is simple. We do not have time to waste and we don't enjoy wasting other people's time.

At Africatransport, we do not issue letters of intent, weattract new members through the availability of the actual contract, because we are legally entitled to do so and we know that the contract is not valid until it is signed and accepted by duly authorised represtatvives party to the actual contract or agreement.

Having said the above though, some letters of intent are absolutely genuine - but these genuine letters of intent are diluted by the garbage moving around.



Not many contract holders though are as brave as us to make publicly availablethe actual contract. Why do we do this - because we have the main contract already and circumventing Africatransport is not always easy. We take precautionary measures and we carefully study and analysewhat we make publicly available and what we keep until an agreement is finalised between us and our member transporter, truck owner and contracting client.

Worst of all - I have met people that paid R10 000 and even R15 000 for an LOI - Others paid up to R50 000 for illegitimate contracts. Africatransport do not charge any placement feesand we do not sell any contracts. We contract truck owners only and we pay them for their truck loads. Once you start working with Africatransport, your truck will always be working. We do not allow broker involvement and we verify truck ownership (together with other requirement) prior to any truck starting with us.

For now, I hope that one day we will get back to 2 or 3 years ago when a letter of intent was something genuine enought to attract a reaction.

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Article Tags: Coal Transport, South Africa, The Abuse, The Letter of Inten, Transport, Transport Contracts, Transportation Contracts



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