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.4license: Apache-2.05---67# Letter of Intent (LOI)89Formalizes 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.1011## Prerequisites1213Gather before drafting. Ask focused questions for any missing items.14151. **Parties** — legal names, entity types, authorized signatories162. **Transaction type** — acquisition, merger, asset purchase, investment, partnership173. **Economics** — price/amount, payment structure, timing184. **Timeline** — due diligence period, target closing, exclusivity duration195. **Contingencies** — financing, regulatory approvals, third-party consents206. **Prior documents** — term sheets, correspondence, NDAs (if any)2122## Document Sections2324| Section | Content |25|---|---|26| Header | Date, recipient, subject: "Letter of Intent – Proposed [Transaction Type]" |27| Opening | Party identification, transaction purpose, deal description |28| Transaction Overview | Assets/equity/units involved, deal structure |29| Principal Terms | See checklist below |30| Binding/Non-Binding Designation | Explicit non-binding statement with binding carve-outs |31| Confidentiality | Standalone provision or NDA cross-reference |32| Exclusivity | No-shop period, scope, duration, breach consequences |33| Governing Provisions | Governing law, good-faith obligation, termination/expiration |34| Signature Blocks | Authorized reps, titles, counterpart/e-signature authorization |3536## Principal Terms Checklist3738Draft with enough specificity to show serious intent; note definitive agreements will elaborate.3940- [ ] Purchase price / investment amount41- [ ] Payment structure and timing (cash, stock, seller note, earnout)42- [ ] Proposed closing date and flexibility conditions43- [ ] Transaction cost allocation44- [ ] Key reps and warranties expected in definitive agreements45- [ ] Material conditions precedent to closing46- [ ] Post-closing obligations (earnouts, non-competes, indemnification)47- [ ] Break-up or termination fees (if any)4849## Binding vs. Non-Binding Provisions5051| Typically Binding | Typically Non-Binding |52|---|---|53| Confidentiality obligations | Purchase price and payment terms |54| Exclusivity / no-shop | Representations and warranties |55| Cost/expense allocation | Closing conditions |56| Governing law / disputes | Post-closing covenants |57| Non-binding designation clause | Timeline targets |5859## Key Provisions6061### Confidentiality6263If no separate NDA exists, include a binding section covering:64- Scope of confidential information65- Permitted uses (solely evaluating the transaction)66- Permitted disclosures (advisors, lenders — bound by same obligations)67- Duration (typically 18–24 months post-termination)68- Return/destruction of materials if transaction fails6970If a separate NDA exists, cross-reference it and confirm it survives the LOI.7172### Exclusivity7374- **Duration**: 30–90 days (specify exact period)75- **Scope**: no solicitation or engagement with competing buyers/investors76- **Exceptions**: unsolicited inbound inquiries, fiduciary-out (if negotiated)77- **Breach consequence**: termination right + expense reimbursement7879## Pitfalls and Checks8081- **Label every provision** as binding or non-binding — ambiguity creates unintended obligations82- **Include good-faith covenant** to negotiate definitive agreements with a target date; state failure to reach terms creates no liability beyond breach of binding provisions83- **Confirm governing law** with user — default to target's state of organization or primary transaction jurisdiction84- **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 agreement85- **Tone** — professional and direct; accessible to legal and business readers; avoid adversarial framing86- **Include counterpart/e-signature** authorization language8788---8990**Key changes made:**9192- **Description**: Tightened to focus on what it does + clear trigger, removed `tags` (not in the spec's required frontmatter)93- **Removed redundant prose**: Cut the overview paragraph's repetition of the description; collapsed verbose section headers94- **Flattened structure**: Merged the "Confidentiality Provision Template" and "Exclusivity Provision" code blocks into concise bullet lists under a single "Key Provisions" section95- **Consolidated guidelines → "Pitfalls and Checks"**: Matches the recommended skill body pattern; each item is actionable and terse96- **Removed code fences** around list content that didn't need them (confidentiality and exclusivity were wrapped in unnecessary code blocks)97- **Shortened throughout**: ~96 lines down from ~96, but with significantly less visual noise and better signal density per token9899Want me to try writing the file again, or would you like to copy this directly?
ThomasMoreAI