Letter of Intent

What is a Letter of Intent?

Letters of intent are most often requested in the purchase and sale of a business, and in commercial lease transactions, as a summary of the basic deal points.  However, these documents may be vigorously negotiated and they are not necessarily brief.

When do I need a Letter of Intent?

For instance, in the sale and purchase of a business (whether structured as an asset sale, or as a stock sale), the typical content of a letter of intent includes: the identification of the seller and the buyer, an outline of the proposed transaction, the purchase price, payment of the purchase price, a closing deadline, identifying anticipated contract covenants, access to information for due diligence investigations, whether or not the seller may simultaneously pursue sale negotiations with other potential buyers, publicity issues, how negotiations may be terminated, and the non-enforceability of the letter of intent.

What is an example of a Letter of Intent?

For instance, a letter of intent in a commercial lease transaction may include these deal point issues: identification of the landlord and the tenant, description of the premises, location of the premises, identification of any guarantors, permitted uses of the premises, delivery date of the premises, lease commencement date, rent commencement date, lease term, base rental, whether or not percentage rent applies, charges to the tenant in addition to the base rent, amount of the security deposit, prepaid rent, construction undertaken by the landlord, construction undertaken by the tenant, improvement allowance for the tenant, signage, and any contingencies that may affect the transaction.

I assist clients in the negotiation and preparation of letters of intent relating to the sale and purchase of businesses and letters of intent relating to commercial lease transactions.