Firm logo- R 3M Law LLP
SPEAK WITH ONE OF OUR ATTORNEYS TODAY.
SPEAK WITH ONE OF
OUR ATTORNEYS TODAY.

Real World Solutions To Real World Challenges

Best Law Firms 2023

R3M has been voted US NEWS & WORLD REPORTS Best Law Firms for 10 Years

Best Law Firms New York City 2023
Best Lawyers - Lawyer Logo
Firm logo- R 3M Law LLP

Location

335 Madison Avenue, 9th Floor
New York, NY 10017

Toll Free: 877.373.6811
Fax: 212.913.9642
Map & Directions

close

Get Answers

Few things are more challenging and stressful than buying or selling a business. After all, there is likely a substantial amount of money on the line. You do not have to leave the success of the deal to chance, however. A well-drafted letter of intent outlines the major obligations and responsibilities of both parties.

Whether you are buying or selling a business, you have great flexibility to include a variety of terms in the letter of intent. You must, however, name both the parties to the sale and identify the business venture. You probably also want to address a few other topics. Here are three common ones:

  1. Price 

You and the other party may have agreed on a purchase price. If so, your letter of intent should define it. You can also include details about financing if necessary. Likewise, if the sale depends on contingencies, outline them in your letter of intent.

  1. Timing 

Time is a very critical item in the purchase or sale of a business venture. You should think about more than the just the wclosing date, though. You may want to memorialize timing benchmarks in your letter of intent. When doing so, you may also want to describe the consequences of a missed deadline.

  1. Diligence 

Finally, your letter of intent should address how each party is going to perform due diligence. This may include a review of finances, equipment, inventory, intellectual property and other material diligence items. If a nondisclosure or confidentiality agreement is necessary to facilitate due diligence, you may want to incorporate it into the letter of intent as well.

If you are buying or selling a business, drafting a letter of intent is usually a sensible first step. When you do so, the language you use in the letter of intent matters. With care, you can create a letter of intent that makes the material terms crystal clear for everyone involved and creates the roadmap to be followed when the formal purchase and sale agreement is drafted.