A letter of intent (LOI) is often completed after the first stage of negotiations in a purchase and sale transaction for a business. 

The buyer and seller want to memorialize the principal terms in an LOI before the lawyers draft the entire purchase and sale agreement.

Some of the key provisions found in a letter of intent may include:

  • Description of the primary transaction
  • Pricing terms
  • Description of related agreements
  • Representations and warranties made by the buyer, seller, or both
  • Obligations of the seller
  • Obligations of the buyer
  • Confidentiality obligations
  • Non-solicitation obligations
  • Termination provisions
  • Whether the LOI is binding, non-binding, or only certain parts are binding or non-binding