Early on in any negotiation process, like a buyout, merger, lease or recruitment offer, both parties should think about writing a Letter of Intent, used to lock in exclusive negotiation rights. A Letter of Intent is not a binding contract, but it does show that both parties are ready to seriously negotiate and agree on a final transaction. A company can also use a Letter of Intent to effectively prove to its investors and creditors that the other company is interested in completing the negotiations.
A Letter of Intent outlines the general plans of the companies or individuals, and allows both sides to plan accordingly. The letter usually includes:
- Specific dates
- Plans for expanding operations
- Plans for downsizing operations
- Other conditions of a business agreement
Each company or individual can then inform its stockholders, and arrange for more financing if need be.
If you are ready to write your Letter of Intent, you can use Rocket Lawyer's easy online interview to complete your letter in minutes!
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.