Free Memorandum of Understanding

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Memorandum of Understanding

QGtype


Buying or selling
Contracting
Entering into a partnership
Leasing
Other

A Memorandum of Understanding can be used to negotiate the terms of the sale of real estate, a business, shares, or goods. Remember: A Memorandum of Understanding is NOT intended to be binding upon either party - its purpose is to express the intent of the Parties to continue to negotiate in good faith and to outline the key aspects of the transaction.



Your Memorandum of Understanding

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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:

  1. The Seller is the owner of residential property that is available for sale.
  2. 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:

  1. Non-Binding
  2. This Document does not create a binding agreement between the Purchaser and the Seller and will not be enforceable. Only the Contract, duly executed by the Purchaser and the Seller, will be enforceable. The terms and conditions of the Contract will supersede any terms and conditions contained in this Document. The Purchaser and the Seller are not prevented from entering into negotiations with third parties with regard to the subject matter of this Document.
  3. Transaction Description
  4. The property (the "Property") that is the subject of this Document is located at:
    • ___________________________________________________________
      ___________________________________________________________
      ___________________________________________________________
      ___________________________________________________________
      .

  5. Purchase Price
  6. The Purchaser will pay to the Seller the amount of $___________ CAD on or before the 17th day of October, 2021 (the "Closing Date") as final payment in full for the Property.
  7. The Purchaser will take possession of the Property on the 17th day of October, 2021.
  8. Real Property Disclosure
  9. 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.
  10. Representations
  11. The Seller represents and warrants that the Property is free and clear of any liens, charges, encumbrances or rights of third parties 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.
  12. Terms and Conditions
  13. The Contract will be subject to the Purchaser being approved for all financing by the Closing Date. Either the Seller or the Purchaser may cancel the Contract if the Purchaser cannot obtain adequate financing by the Closing Date despite due diligence and good faith on the part of the Purchaser.
  14. The Purchaser will accept 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)

Letter of Intent Details

What is a Letter of Intent?

A Letter of Intent, also known as an LOI or letter of interest, is a non-binding document that specifies one party's intentions towards another.

Generally, a Letter of Intent is used for business or real estate transactions to indicate an interested party's intention to purchase the business or property.

What is in a Letter of Intent?

A Letter of Intent includes information about:

  • Both parties involved in the proposed transaction
  • A description of the transaction, meaning the property or business address, or specifications about what the Letter of Intent is for
  • Pricing and deposit details
  • What the terms are (if any)

A Letter of Intent will also list details regarding the intended transaction, such as, if it is real estate related, whether it is commercial, residential, industrial, agricultural, or recreational property.

In a business transaction, it would specify what was being purchased, such as assets (furniture, supplies, vehicles), or shares.

You may also include clauses in regards to confidentiality, if necessary.

What should I use a Letter of Intent for?

A Letter of Intent can serve many purposes, the most common being that it can provide a clear, concise version of your negotiations prior to signing a binding contract. This means that both parties involved can ensure they are on the same terms, and in agreement, before the transaction moves on to the next step.

Is a Letter of Intent legally binding?

LawDepot's Letter of Intent is not legally binding. A Letter of Intent serves to outline the terms of an agreement before an actual contract is made.

For example, if you intend to purchase a business, but are waiting on certain details to be finalized before going ahead, you may wish to use a Letter of Intent to show the seller that you are serious about your intentions in relation to purchasing their company.

This would not make you legally obligated to purchase the business, but would simply make your intentions clear to the seller.

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