What is a Letter of Intent? Why Does It Matter?

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The Evergreen Clause

This is an important issue for copier leasing. The Evergreen Clause states that you are required to write a Letter of Intent (LOI) and send to the leasing company between 90-120 days before your lease expires, which leaves you with a 30 day window to notify them you want out of your contract.  There are situations in which the office manager quits and because they were the only employee in the company aware of the leasing agreement expiration date, the window is missed.

Copier Leasing

The copier leasing agreement states that your copier lease may renew for up to a full 12 months if they never received your letter of intent. If the LOI is never sent in, you’ll be locked in and required to pay for another year regardless of your expiration date.

It is unlikely that the copier sales representative will alert you before your lease expires. It is also unlikely that they will tell you that your LOI should be printed on your letterhead, signed, and faxed or emailed back to the leasing company before the deadline.  It is in their best interest to make sure that you don’t even know what LOI stands for and that it never gets sent in. They walk away smiling because they banked on the additional year of commission.

Expert Tip

Mark your calendar 6 months before your lease expires. If you are considering signing a new lease, make sure you suggest or demand changing the terms to 30 day renewals.