Date: _____________________________________________
Reference: _____________________________________________
To:
_____________________________________________
_____________________________________________
_____________________________________________
Attention: _____________________________________________
Dear _____________________________________________,
RE: Letter of Intent — [Brief Description of Transaction]
This Letter of Intent (the "LOI") is issued by _____________________________________________ ("Issuing Party") to _____________________________________________ ("Receiving Party") in connection with the proposed commercial transaction described below. This LOI expresses the genuine commercial interest and intention of the Issuing Party to proceed with the transaction on the terms summarised herein, subject to the conditions stated and the negotiation and execution of a formal commercial agreement.
Unless expressly stated otherwise in this LOI, its contents are non-binding and do not constitute a legally binding obligation on either Party. The binding provisions of this LOI are identified in Section 8.
1. Description of the Proposed Transaction
The Issuing Party hereby expresses its intention to:
[ ] Purchase / import the following goods or services:
Description: _____________________________________________
HS Code(s): _____________________________________________
Country of Origin: _____________________________________________
Quantity: _____________________________________________
Specification: As per the attached product specification or as to be agreed.
[ ] Supply / export the following goods or services:
Description: _____________________________________________
Quantity: _____________________________________________
Destination: _____________________________________________
[ ] Enter into a [joint venture / partnership / investment / other: _____________] arrangement as follows:
_____________________________________________
2. Proposed Commercial Terms
The following commercial terms are proposed, subject to negotiation in the formal agreement:
Indicative Price / Value: _____________________________________________
Incoterms (if applicable): _____________________________________________
Payment Terms: _____________________________________________
Delivery / Execution Timeline: _____________________________________________
Minimum Order Quantity: _____________________________________________
Quality / Specification: _____________________________________________
3. Conditions
The Issuing Party's intention to proceed with the transaction is subject to the following conditions:
Satisfactory completion of due diligence on the Receiving Party, including review of financial standing, regulatory compliance, and operational capability;
Negotiation and execution of a formal commercial agreement on mutually acceptable terms;
Receipt of all required regulatory approvals, export licences, and import authorisations;
Arrangement of satisfactory payment terms, including (where applicable) issuance of a Letter of Credit or other agreed payment instrument;
Confirmation of product specifications and quality standards to the Issuing Party's satisfaction;
_____________________________________________ (any other conditions).
4. Exclusivity
For a period of _____ days from the date of this LOI (the "Exclusivity Period"), the Receiving Party agrees not to enter into negotiations with, or provide equivalent commercial information to, any third party in relation to the same or substantially similar transaction without the prior written consent of the Issuing Party. The Receiving Party acknowledges that the Issuing Party is investing time and resources in evaluating the transaction on the basis of this commitment.
5. Due Diligence
The Receiving Party agrees to provide the Issuing Party with reasonable access to such information, documentation, and personnel as the Issuing Party may reasonably require to conduct its due diligence in connection with the proposed transaction, including but not limited to: company registration documents; audited financial statements for the last _____ years; product certifications and quality documentation; export licence and regulatory compliance records; and references from existing commercial partners.
6. Costs and Expenses
Each Party shall bear its own costs and expenses in connection with the negotiation and preparation of the proposed transaction, including legal, advisory, and due diligence costs, unless otherwise agreed in writing. Neither Party shall be liable to the other for any pre-contractual costs or expenses incurred in connection with this LOI if the transaction does not proceed, save in the case of a breach of the binding provisions of this LOI.
7. Facilitating Agent
This transaction has been facilitated by _____________________________________________ ("Agent"). The Issuing Party and the Receiving Party both acknowledge the Agent's role in identifying and introducing the Parties to each other. The commission arrangement with the Agent is as follows: _____________________________________________. This acknowledgement of the Agent's role and the commission arrangement is binding upon signature.
8. Binding Provisions
The following provisions of this LOI are legally binding upon signature and shall remain in force regardless of whether the proposed transaction proceeds:
Exclusivity: The obligations of the Receiving Party under clause 4 are binding.
Confidentiality: Each Party shall keep strictly confidential the terms of this LOI and all information exchanged in connection with the proposed transaction, and shall not disclose such information to any third party without the other Party's prior written consent. This obligation shall survive the expiry or withdrawal of this LOI for a period of two (2) years.
Agent Acknowledgement: The acknowledgement of the Agent's role and commission arrangement set out in clause 7 is binding.
Governing Law: This LOI (including the binding provisions) shall be governed by the laws of _____________________________________________.
9. Validity and Withdrawal
This LOI shall remain valid for a period of _____ days from the date hereof, unless earlier withdrawn by the Issuing Party by written notice to the Receiving Party. The Issuing Party reserves the right to withdraw or modify this LOI at any time prior to execution of a formal commercial agreement, without liability to the Receiving Party, save in respect of the binding provisions identified in clause 8. Withdrawal of this LOI shall not affect any binding obligations already incurred.
10. No Binding Commercial Commitment
Save as expressly stated in clause 8, this LOI does not constitute a binding offer, acceptance, or agreement to purchase or supply any goods or services, and shall not be construed as creating any binding commercial, financial, or legal obligation on either Party. Neither Party shall be entitled to rely on this LOI as evidence of a concluded contract.
11. Next Steps
If the Receiving Party confirms its agreement to the terms of this LOI by countersigning and returning a copy, the Parties propose to proceed as follows:
Exchange of due diligence documentation within _____ business days;
Issuing Party to revert with feedback and proposed terms of formal agreement within _____ business days of completing due diligence;
Target date for execution of formal commercial agreement: _____________.
We look forward to exploring this opportunity with you and remain available to discuss any aspect of this LOI at your convenience.
Yours sincerely,
For and on behalf of the Issuing Party:
Authorised Signatory: _____________________________________________
Full Name: _____________________________________________
Title: _____________________________________________
Entity Name: _____________________________________________
Date: _____________________________________________
ACKNOWLEDGEMENT AND COUNTERSIGNATURE BY RECEIVING PARTY
The Receiving Party confirms that it has read and understood this Letter of Intent, agrees to the binding provisions set out in clause 8, and confirms its intention to proceed in accordance with the next steps set out in clause 11.
For and on behalf of the Receiving Party:
Authorised Signatory: _____________________________________________
Full Name: _____________________________________________
Title: _____________________________________________
Entity Name: _____________________________________________
Date: _____________________________________________
Doc 14 — Letter of Intent (LOI) — Neutral Template