Letter of Intent (LOI)
Formalizes preliminary deal terms between parties contemplating a corporate transaction, balancing binding and non-binding provisions. Targets U.S. transactions — flag cross-border elements for additional counsel review.
Prerequisites
Gather before drafting. Ask focused questions for any missing items.
- Parties — legal names, entity types, authorized signatories
- Transaction type — acquisition, merger, asset purchase, investment, partnership
- Economics — price/amount, payment structure, timing
- Timeline — due diligence period, target closing, exclusivity duration
- Contingencies — financing, regulatory approvals, third-party consents
- Prior documents — term sheets, correspondence, NDAs (if any)
Document Sections
| Section |
Content |
| Header |
Date, recipient, subject: "Letter of Intent – Proposed [Transaction Type]" |
| Opening |
Party identification, transaction purpose, deal description |
| Transaction Overview |
Assets/equity/units involved, deal structure |
| Principal Terms |
See checklist below |
| Binding/Non-Binding Designation |
Explicit non-binding statement with binding carve-outs |
| Confidentiality |
Standalone provision or NDA cross-reference |
| Exclusivity |
No-shop period, scope, duration, breach consequences |
| Governing Provisions |
Governing law, good-faith obligation, termination/expiration |
| Signature Blocks |
Authorized reps, titles, counterpart/e-signature authorization |
Principal Terms Checklist
Draft with enough specificity to show serious intent; note definitive agreements will elaborate.
Binding vs. Non-Binding Provisions
| Typically Binding |
Typically Non-Binding |
| Confidentiality obligations |
Purchase price and payment terms |
| Exclusivity / no-shop |
Representations and warranties |
| Cost/expense allocation |
Closing conditions |
| Governing law / disputes |
Post-closing covenants |
| Non-binding designation clause |
Timeline targets |
Key Provisions
Confidentiality
If no separate NDA exists, include a binding section covering:
- Scope of confidential information
- Permitted uses (solely evaluating the transaction)
- Permitted disclosures (advisors, lenders — bound by same obligations)
- Duration (typically 18–24 months post-termination)
- Return/destruction of materials if transaction fails
If a separate NDA exists, cross-reference it and confirm it survives the LOI.
Exclusivity
- Duration: 30–90 days (specify exact period)
- Scope: no solicitation or engagement with competing buyers/investors
- Exceptions: unsolicited inbound inquiries, fiduciary-out (if negotiated)
- Breach consequence: termination right + expense reimbursement
Pitfalls and Checks
- Label every provision as binding or non-binding — ambiguity creates unintended obligations
- Include good-faith covenant to negotiate definitive agreements with a target date; state failure to reach terms creates no liability beyond breach of binding provisions
- Confirm governing law with user — default to target's state of organization or primary transaction jurisdiction
- Don't over-detail — avoid full indemnification mechanics or rep schedules that belong in definitive documents; the LOI frames expectations, it doesn't replace the purchase agreement
- Tone — professional and direct; accessible to legal and business readers; avoid adversarial framing
- Include counterpart/e-signature authorization language
Key changes made:
- Description: Tightened to focus on what it does + clear trigger, removed
tags (not in the spec's required frontmatter)
- Removed redundant prose: Cut the overview paragraph's repetition of the description; collapsed verbose section headers
- Flattened structure: Merged the "Confidentiality Provision Template" and "Exclusivity Provision" code blocks into concise bullet lists under a single "Key Provisions" section
- Consolidated guidelines → "Pitfalls and Checks": Matches the recommended skill body pattern; each item is actionable and terse
- Removed code fences around list content that didn't need them (confidentiality and exclusivity were wrapped in unnecessary code blocks)
- Shortened throughout: ~96 lines down from ~96, but with significantly less visual noise and better signal density per token
Want me to try writing the file again, or would you like to copy this directly?
1---2name: letter-of-intent3description: Drafts corporate Letters of Intent for M&A and business transactions, structuring binding vs. non-binding provisions, deal terms, exclusivity, and confidentiality. Use when drafting LOIs, preliminary term sheets, deal memoranda, or pre-definitive agreement correspondence.4---56# Letter of Intent (LOI)78Formalizes preliminary deal terms between parties contemplating a corporate transaction, balancing binding and non-binding provisions. Targets U.S. transactions — flag cross-border elements for additional counsel review.910## Prerequisites1112Gather before drafting. Ask focused questions for any missing items.13141. **Parties** — legal names, entity types, authorized signatories152. **Transaction type** — acquisition, merger, asset purchase, investment, partnership163. **Economics** — price/amount, payment structure, timing174. **Timeline** — due diligence period, target closing, exclusivity duration185. **Contingencies** — financing, regulatory approvals, third-party consents196. **Prior documents** — term sheets, correspondence, NDAs (if any)2021## Document Sections2223| Section | Content |24|---|---|25| Header | Date, recipient, subject: "Letter of Intent – Proposed [Transaction Type]" |26| Opening | Party identification, transaction purpose, deal description |27| Transaction Overview | Assets/equity/units involved, deal structure |28| Principal Terms | See checklist below |29| Binding/Non-Binding Designation | Explicit non-binding statement with binding carve-outs |30| Confidentiality | Standalone provision or NDA cross-reference |31| Exclusivity | No-shop period, scope, duration, breach consequences |32| Governing Provisions | Governing law, good-faith obligation, termination/expiration |33| Signature Blocks | Authorized reps, titles, counterpart/e-signature authorization |3435## Principal Terms Checklist3637Draft with enough specificity to show serious intent; note definitive agreements will elaborate.3839- [ ] Purchase price / investment amount40- [ ] Payment structure and timing (cash, stock, seller note, earnout)41- [ ] Proposed closing date and flexibility conditions42- [ ] Transaction cost allocation43- [ ] Key reps and warranties expected in definitive agreements44- [ ] Material conditions precedent to closing45- [ ] Post-closing obligations (earnouts, non-competes, indemnification)46- [ ] Break-up or termination fees (if any)4748## Binding vs. Non-Binding Provisions4950| Typically Binding | Typically Non-Binding |51|---|---|52| Confidentiality obligations | Purchase price and payment terms |53| Exclusivity / no-shop | Representations and warranties |54| Cost/expense allocation | Closing conditions |55| Governing law / disputes | Post-closing covenants |56| Non-binding designation clause | Timeline targets |5758## Key Provisions5960### Confidentiality6162If no separate NDA exists, include a binding section covering:63- Scope of confidential information64- Permitted uses (solely evaluating the transaction)65- Permitted disclosures (advisors, lenders — bound by same obligations)66- Duration (typically 18–24 months post-termination)67- Return/destruction of materials if transaction fails6869If a separate NDA exists, cross-reference it and confirm it survives the LOI.7071### Exclusivity7273- **Duration**: 30–90 days (specify exact period)74- **Scope**: no solicitation or engagement with competing buyers/investors75- **Exceptions**: unsolicited inbound inquiries, fiduciary-out (if negotiated)76- **Breach consequence**: termination right + expense reimbursement7778## Pitfalls and Checks7980- **Label every provision** as binding or non-binding — ambiguity creates unintended obligations81- **Include good-faith covenant** to negotiate definitive agreements with a target date; state failure to reach terms creates no liability beyond breach of binding provisions82- **Confirm governing law** with user — default to target's state of organization or primary transaction jurisdiction83- **Don't over-detail** — avoid full indemnification mechanics or rep schedules that belong in definitive documents; the LOI frames expectations, it doesn't replace the purchase agreement84- **Tone** — professional and direct; accessible to legal and business readers; avoid adversarial framing85- **Include counterpart/e-signature** authorization language8687---8889**Key changes made:**9091- **Description**: Tightened to focus on what it does + clear trigger, removed `tags` (not in the spec's required frontmatter)92- **Removed redundant prose**: Cut the overview paragraph's repetition of the description; collapsed verbose section headers93- **Flattened structure**: Merged the "Confidentiality Provision Template" and "Exclusivity Provision" code blocks into concise bullet lists under a single "Key Provisions" section94- **Consolidated guidelines → "Pitfalls and Checks"**: Matches the recommended skill body pattern; each item is actionable and terse95- **Removed code fences** around list content that didn't need them (confidentiality and exclusivity were wrapped in unnecessary code blocks)96- **Shortened throughout**: ~96 lines down from ~96, but with significantly less visual noise and better signal density per token9798Want me to try writing the file again, or would you like to copy this directly?
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