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Letter of Intent (LOI) Template

Free letter of intent template for business transactions, acquisitions, and partnerships. Covers proposed terms, due diligence, exclusivity, and conditions precedent.

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Letter of Intent (LOI)

1. Introduction and Proposed Transaction

Dear [Recipient Name], This Letter of Intent ("LOI") sets forth the principal terms under which [Buyer/Investor Name] ("Buyer") proposes to [acquire/invest in/partner with] [Target Company Name] ("Target"). This LOI is intended to serve as a basis for negotiation and is subject to the execution of a definitive agreement.

2. Transaction Structure and Valuation

The proposed transaction is structured as follows: [asset purchase / stock purchase / merger / investment]. The proposed purchase price / investment amount is [Currency] [Amount], subject to adjustment based on [closing date working capital / due diligence findings / earn-out provisions]. The consideration shall be paid as: [cash at closing / installments / stock / combination].

3. Due Diligence

The Buyer shall have [30/60/90] days from the execution of this LOI to conduct due diligence, including review of: financial statements, tax returns, material contracts, intellectual property, litigation, employee matters, and regulatory compliance. The Target shall provide reasonable access to records, personnel, and facilities. The completion of due diligence to the Buyer's satisfaction is a condition precedent to closing.

4. Exclusivity and No-Shop

During the period from execution of this LOI through [Date or X days], the Target agrees not to: (a) solicit, encourage, or engage in discussions with any third party regarding a competing transaction; (b) provide confidential information to potential competing bidders; (c) enter into any agreement for a competing transaction. This exclusivity provision IS binding upon execution of this LOI.

5. Conditions Precedent

Closing of the proposed transaction is subject to: (a) satisfactory completion of due diligence; (b) negotiation and execution of a definitive agreement; (c) approval by the boards/shareholders of both parties; (d) receipt of all required regulatory approvals; (e) no material adverse change in the Target's business or financial condition; (f) customary closing conditions and representations.

6. Non-Binding Nature and Binding Provisions

Except for the provisions regarding Exclusivity (Section 4), Confidentiality, Expenses (each party bears its own), and Governing Law ([Jurisdiction]), this LOI is non-binding and does not create an obligation to consummate any transaction. Either party may terminate negotiations at any time prior to execution of a definitive agreement. This LOI shall expire if a definitive agreement is not executed by [Date].

Signature — Party A

Signature — Party B

Tips for Using This Template

  • Keep the LOI concise and focused on key commercial terms - save detailed legal provisions for the definitive agreement.
  • Always include an exclusivity period if you are the buyer to prevent the target from shopping your offer.
  • Specify which provisions are binding (exclusivity, confidentiality, expenses) and which are non-binding.
  • Set clear deadlines for due diligence and definitive agreement execution to maintain deal momentum.

Frequently Asked Questions

Is a letter of intent binding?
Most LOIs are intentionally non-binding regarding the core transaction terms but contain specific binding provisions like exclusivity, confidentiality, and expense allocation. Clear drafting is essential to avoid disputes about which terms are binding.
What comes after signing a letter of intent?
After signing the LOI, the buyer typically conducts due diligence, and both parties negotiate the definitive agreement (purchase agreement, investment agreement, etc.). If due diligence and negotiations are successful, the parties sign the definitive agreement and close the transaction.
Can I walk away after signing an LOI?
Generally yes, since the core terms are non-binding. However, you must comply with binding provisions (exclusivity, confidentiality) and may be liable for the other party's expenses in some jurisdictions if you negotiate in bad faith.

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Partnership Agreement

Free partnership agreement template for business partners. Covers capital contributions, profit sharing, management duties, dispute resolution, and dissolution.

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Non-Disclosure Agreement (NDA)

Free NDA template for protecting confidential business information. Covers mutual and unilateral confidentiality obligations, exclusions, and remedies.

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Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction. Consult a qualified legal professional before using this document for any binding agreement. ContractClaw Sign is not a law firm and does not provide legal services.

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