Letter of Intent (LOI)
Drafts a transaction LOI that advances execution while preserving negotiating flexibility. Default posture: non-binding except explicitly designated provisions.
Prerequisites
- Party identities, entity forms, and governing jurisdictions.
- Transaction type and structure (asset sale, stock sale, merger, investment, JV, option).
- Agreed economics: price, payment schedule, earn-outs, escrows, caps.
- Timeline: signing target, exclusivity window, diligence period, closing date.
- Conditions precedent and responsibility allocation (regulatory, financing, consents).
- Binding vs non-binding designation for each term set.
- Known constraints: antitrust, sector regulations, board/lender approvals.
Output Structure / Process
Produce an audit-ready LOI in business-letter format using this sequence.
1) Intake Validation
2) Clause Matrix
| Section |
Required? |
Binding? |
| Date / Parties / Purpose |
Yes |
Non-binding |
| Transaction Overview |
Yes |
Non-binding |
| Principal Terms (price, structure, adjustments) |
Yes |
Non-binding unless stated |
| Conditions Precedent |
Yes |
Non-binding |
| Definitive Agreement Process |
Yes |
Mixed |
| Exclusivity / No-Shop |
Optional |
Usually binding |
| Confidentiality |
Optional/Yes |
Usually binding |
| Expenses / Costs |
Optional |
Usually binding |
| Liability Limitation / No-Action |
Optional |
Usually binding |
| Governing Law / Disputes |
Yes |
Binding |
| Signatures / Counterparts |
Yes |
Binding |
3) Drafting Rules
- Always include a plain-language binding-effect section with an enumerated list of binding carve-outs.
- Include no-liability clause for failure to close and good-faith negotiation language for definitive agreements.
- Keep conditions precedent objective, verifiable, and assigned to a responsible party.
- Do not embed tax opinions; use a placeholder for tax allocations.
- Definitive agreement controls if conflict with LOI.
4) Template Skeleton
[Date]
[Party A Name]
[Party B Name]
RE: Letter of Intent – Proposed [Transaction Type]
[Opening: parties + transaction purpose]
1. Transaction Overview
2. Transaction Structure
3. Principal Terms
4. Conditions Precedent
5. Binding Commitments (Confidentiality / Exclusivity / Costs / Governing Law)
6. Definitive Agreements and Timeline
7. Termination and Liability
8. Miscellaneous (integration, notices, counsel, no assignment)
9. Signature Blocks
5) Quality Gate
Guidelines
- Use clean drafting style; avoid overcommitment language in non-binding portions.
- Do not omit remedies for breach of expressly binding clauses.
- If existing NDA is signed, state LOI is supplemental and preserve NDA hierarchy.
- For regulated sectors, add counsel review notes on approvals and filing requirements.
- For cross-border transactions, flag foreign-law and conflict-of-laws risk.
- If anti-circumvention concern exists, add carve-outs and enforcement language for exclusivity.
1---2name: letter-of-intent-loi3description: >-4 Drafts U.S. corporate transaction Letters of Intent (LOI) for mergers,5 acquisitions, investments, and strategic alliances. Separates non-binding6 intent from enforceable obligations and defines deal structure, key7 economics, and closing path. Use when converting deal terms into a8 preliminary transaction document. Trigger keywords: "LOI", "letter of9 intent", "M&A LOI", "merger term sheet", "no-shop", "exclusivity",10 "deal letter".11---1213# Letter of Intent (LOI)1415Drafts a transaction LOI that advances execution while preserving negotiating flexibility. Default posture: non-binding except explicitly designated provisions.1617## Prerequisites18191. Party identities, entity forms, and governing jurisdictions.202. Transaction type and structure (asset sale, stock sale, merger, investment, JV, option).213. Agreed economics: price, payment schedule, earn-outs, escrows, caps.224. Timeline: signing target, exclusivity window, diligence period, closing date.235. Conditions precedent and responsibility allocation (regulatory, financing, consents).246. Binding vs non-binding designation for each term set.257. Known constraints: antitrust, sector regulations, board/lender approvals.2627## Output Structure / Process2829Produce an audit-ready LOI in business-letter format using this sequence.3031### 1) Intake Validation3233- [ ] Party names and addresses complete.34- [ ] Transaction purpose stated in one unambiguous sentence.35- [ ] Economic terms fully defined and internally consistent.36- [ ] Timeline mapped to conditions precedent.37- [ ] Definitive documents identified (SPA, merger agreement, ancillaries).38- [ ] Binding clause set explicitly chosen by user.39- [ ] Governing law and jurisdictional basis confirmed.4041### 2) Clause Matrix4243| Section | Required? | Binding? |44|---|---|---|45| Date / Parties / Purpose | Yes | Non-binding |46| Transaction Overview | Yes | Non-binding |47| Principal Terms (price, structure, adjustments) | Yes | Non-binding unless stated |48| Conditions Precedent | Yes | Non-binding |49| Definitive Agreement Process | Yes | Mixed |50| Exclusivity / No-Shop | Optional | Usually binding |51| Confidentiality | Optional/Yes | Usually binding |52| Expenses / Costs | Optional | Usually binding |53| Liability Limitation / No-Action | Optional | Usually binding |54| Governing Law / Disputes | Yes | Binding |55| Signatures / Counterparts | Yes | Binding |5657### 3) Drafting Rules5859- Always include a plain-language binding-effect section with an enumerated list of binding carve-outs.60- Include no-liability clause for failure to close and good-faith negotiation language for definitive agreements.61- Keep conditions precedent objective, verifiable, and assigned to a responsible party.62- Do not embed tax opinions; use a placeholder for tax allocations.63- Definitive agreement controls if conflict with LOI.6465### 4) Template Skeleton6667```text68[Date]69[Party A Name]70[Party B Name]7172RE: Letter of Intent – Proposed [Transaction Type]7374[Opening: parties + transaction purpose]75761. Transaction Overview772. Transaction Structure783. Principal Terms794. Conditions Precedent805. Binding Commitments (Confidentiality / Exclusivity / Costs / Governing Law)816. Definitive Agreements and Timeline827. Termination and Liability838. Miscellaneous (integration, notices, counsel, no assignment)849. Signature Blocks85```8687### 5) Quality Gate8889- [ ] Defined terms consistent throughout (Transaction, Closing Date, Effective Date, CPs).90- [ ] All amounts specify currency, basis, and payment schedule.91- [ ] Non-compete references included only if jurisdictionally supportable and requested.92- [ ] Public-company-sensitive language flagged with compliance review placeholder.9394## Guidelines9596- Use clean drafting style; avoid overcommitment language in non-binding portions.97- Do not omit remedies for breach of expressly binding clauses.98- If existing NDA is signed, state LOI is supplemental and preserve NDA hierarchy.99- For regulated sectors, add counsel review notes on approvals and filing requirements.100- For cross-border transactions, flag foreign-law and conflict-of-laws risk.101- If anti-circumvention concern exists, add carve-outs and enforcement language for exclusivity.
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