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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 -
(the "Seller").
BACKGROUND:
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:
This Document accurately reflects the understanding between the Seller and the Purchaser, signed on this ________ day of ________________, ________.
_______________________________________________ (Purchaser)
_______________________________________________ (Seller)
A Letter of Intent is also known as a/an:
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.
LawDepot's Letter of Intent can be used to indicate an interested party's intention to:
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.
In a Letter of Intent for a business transaction, the letter contains terms for the purchase, including:
Other common clauses might include:
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.
Sample
Letter of Intent
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