Free Memorandum of Understanding

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Memorandum of Understanding

Purchaser Details

Who is purchasing the property?

Type:

Individual

Corporation

Name:

Full address:

e.g. Street, City, State ZIP Code

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MEMORANDUM OF UNDERSTANDING

THIS MEMORANDUM OF UNDERSTANDING (the "Document") made as of this ________ day of ________________, ________ (the "Execution Date"),

BETWEEN:

____________________ of _________________________

(the "Purchaser")

- AND -

____________________ of _________________________

(the "Seller").

BACKGROUND:

The Seller is the owner of residential property that is available for sale.
The Purchaser wishes to purchase residential property from the Seller.

This Document will establish the basic terms to be used in a future real estate contract for sale ("the Contract") between the Seller and the Purchaser. The terms contained in this Document are not comprehensive and it is expected that additional terms may be added, and existing terms may be changed or deleted. The basic terms are as follows:

Non-Binding
This Document does not create a binding agreement between the Purchaser and the Seller and will not be enforceable. Only the future Contract, duly executed by the Seller and the Purchaser, will be enforceable. The terms and conditions of any future Contract will supersede any terms and conditions contained in this Document. The Seller and the Purchaser are not prevented from entering into negotiations with third parties with regard to the subject matter of this Document.
Transaction Description
The property (the "Property") that is the subject of this Document is located at:
- ___________________________________________________________
  ___________________________________________________________
  ___________________________________________________________
  ___________________________________________________________
Purchase Price
The Purchaser will pay to the Seller the amount of $0.00 USD on or before the 14th day of July, 2020 (the "Closing Date") as final payment in full for the Property.
The Purchaser will take possession of the Property on the 14th day of July, 2020.
Real Property Disclosure
The Seller does not know of any material facts that would affect the value of the Property, except those observable by the Purchaser or known to the Seller and stated in this Document.
Representations
The Seller represents and warrants that the Property is free and clear of any liens, charges, encumbrances or rights of others which will not be satisfied out of the sales proceeds. If the representations of the Seller are untrue upon the Closing Date, the Purchaser may terminate any future agreement without penalty and any deposits must be refunded.
Terms and Conditions
The Purchaser accepts the Property in its current state and condition without any further work, repairs, treatments or improvements.

This Document accurately reflects the understanding between the Seller and the Purchaser, signed on this ________ day of ________________, ________.

___________________________
____________________ (Purchaser)

___________________________
____________________ (Seller)

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Letter of Intent

Alternate Names:

A Letter of Intent is also known as a/an:

Memorandum of Understanding (MOU)

LOI

Term Sheet

What is a Letter of Intent?

A Letter of Intent (LOI) is a statement of understanding between two parties. LawDepot's Letter of Intent is non-binding, meaning that the parties are not legally required to follow through with the terms of the agreement.

The LOI acts as a foundation for a definitive agreement. By agreeing to the Letter of Intent, both parties intend to continue negotiations in good faith. When two parties agree to good faith obligations, it means that they are both sincere in their intent to act and carry out their promise.

What can a Letter of Intent be used for?

LawDepot's Letter of Intent can be used to indicate an interested party's intention to:

Purchase or lease real estate
Purchase or lease commercial property
Purchase a business
Merge businesses
Purchase assets
Purchase shares

Who should use a Letter of Intent?

Either party involved in a business or real estate transaction can create a Letter of Intent to set out terms for a deal.

For instance, an interested buyer might submit an LOI to a seller as a formal way to make an offer on a business. At that point, the seller could review the terms in the letter and decide if they wish to move forward with the purchase or if there are negotiations needed beforehand.

If the seller agrees to the content in the LOI, they would give their approval to move into the next stage of the transaction.

What is included in an LOI?

In a Letter of Intent for a business transaction, the letter contains terms for the purchase, including:

Buyer and seller information
Description of the transaction (land, location, type, etc.)
Purchase price

Other common clauses might include:

Confidentiality or exclusivity clauses
Any contingencies for the deal, such as passing the due diligence process

Why should I use a Letter of Intent?

In business or real estate transactions, the purpose of an LOI is to provide an overview of the purchase details in advance of a binding agreement. It allows the seller to evaluate their options before agreeing to the terms with a buyer and saves on the costs involved with negotiation and due diligence.