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A Business Letter Of Intent Is A Legal Document & Not One To Be Messed With
By Peter Kirkham
Representing a memo, a letter of intent contains the details of a 'business deal' between two or more parties and includes the supply of products & services
A letter of intent can be used in a number of situations including a commitment to purchase something, usually a business. It is also referred to as s Memorandum of Agreement (MOA) or Memorandum of Understanding (MOU).
IN THE EARLY STAGES THERE'S VARIOUS OPTIONS AVAILABLE TO YOU.
It is extremely important that you choose the most suitable style so your document presents as professional as possible.
You can select from varying styles including Block Style, Modified Block Style, Semiblock Style. You can have a look at these varying options and select the one that you consider is most suitable.
WHILE DRAFTING A LETTER OF INTENT, THERE'S A NUMBER OF ISSUES YOU NEED TO CONSIDER -
1/ - It's best mentioned that it is a non-binding document. The letter only needs to include the discussion points whilst exposing as little as possible about the actual issue.
If this is not adhered to, the other party may well commence litigation for breaking the contract if you cancel.
2/ - It should be clearly written in a neat & tidy fashion. The
intentions of all concerned needs to be recorded in the document. Before commencing to write you're best to make yourself familiar with the various styles of letters.
3/ - After all the entities involved in the deal sign the memorandum of understanding, a joint press release should be issued. It sends a very positive message to the stockholders of the businesses involved.
4/ - A memorandum of understanding needs to note a time frame within which the agreement should be finalized. This is a significant point. Once you sign the document and issue a press release, all will be watching you.
For the sake of efficieny, it's to everyone's advantage that the agreement is completed as soon as practible.
5/ - A confidentiality accord is something which is an inherent component of any contract. By signing a confidentiality accord, all those included agree that the details hashed out will remain confidential.
These are but a few of the possible issues that you need to keep in mind when drafting up a letter of intent. And, although it can be an expensive exercise, you really should consult your lawyer before you commence.
The money that you save in the event of a problem, may far outweigh the cost of legal advice.
WHAT ABOUT ALL THE OTHER BUSINESS DOCUMENTS... When setting up a new business, the average small business owner needs to wade knee deep in business related paperwork just to kick-off, stressful stuff. If you would like help understanding business documents plus other small business stuff, click here.
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