The letter of intent allows the key cornerstones of the intended corporate transaction to be defined at the beginning of the sales process.
It is an important building block for an orderly and structured sales process and thus a guide for the buyer and seller during the due diligence process. It also forms the framework for the purchase agreement. Without a basic understanding of all the terms of the transaction in a letter of intent, drafting a detailed purchase agreement can be lengthy and difficult.
The LOI should be carefully drafted and negotiated, as the commercial terms agreed therein are usually not deviated from, or only insignificantly deviated from, during the transaction, despite its supposed "non-binding nature".
In cooperation with Dr. Julius Wedemeyer, LL.M. from the law firm Heuking Kühn Lüer Wojtek, DealCircle provides you with an overview of the key issues and core contents of an LOI in the context of a sales process.
However, this Practice Guide does not contain legal advice. The information contained herein is not exhaustive and cannot replace individual advice that takes into account the particularities of each individual case.
Our Best Practice Guide shows you the structure and content of the LOI:
- Purpose of the letter of intent
- Date of signature
- Parties to the letter of intent
- Description of the subject matter of the corporate transaction
- Special features of the transaction
- Strategic considerations
- Procedure and schedule
- Reservations, implementation requirements
- Purchase price and purchase price mechanics, due date and retroactive participation
- Liability regime (guarantees, indemnities)
- Non-competition and non-solicitation clauses
- Exclusivity in favor of the buyer
- Binding nature of the letter of intent
- Other regulations
Read the entire DealCircleLOI Best Practice Guide here:
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