What if negotiations fail?

Unless the LOI contains a binding cost-reimbursement clause, neither party has a right to compensation for failed negotiations.

Can an LOI be signed electronically?

Yes. Electronic signatures are valid and widely used in practice for LOIs and term sheets.

What must an LOI contain?

Identification of the parties, subject matter of negotiations, key economic terms (if agreed), LOI validity period, binding clauses (confidentiality, exclusivity), and a statement of non-binding nature of other provisions.

How long is an LOI valid?

Typically 30–90 days. During this period due diligence and final contract negotiations take place. After expiry, the parties either sign the final contract or negotiations end.

Corporate

Letter of Intent (LOI)

Letter of Intent — collaboration intent

Non-binding or partially binding confirmation of a deal before the final contract.

Start free Features

GDPR compliant · EU-hosted

An LOI shortens M&A transaction completion time by 30 %

72 % of investment negotiations begin with a formal LOI

Exclusivity in an LOI reduces the risk of competing offers by 85 %

An LOI defines the key terms of a future partnership, investment or acquisition — without finalising every detail. Fast, clean, professional.

Legal context

A letter of intent is generally a non-binding document expressing intent, not an obligation. Certain clauses (confidentiality, exclusivity, cost reimbursement) can be binding. It is governed by the general law of pre-contractual negotiations.

Commercial Code § 289 — pre-contract agreement; only explicitly labelled clauses are binding

Legal basis & glossary

When to use a Letter of Intent (LOI)

Before starting acquisition or investment negotiations
To confirm interest in a partnership before legal due diligence
When entering property negotiations
When you want exclusivity during negotiations

What you get

Binding and non-binding versions
Exclusivity clause
Term sheet foundation
Due diligence protection

How it works

From idea to signature

Binding and non-binding versions

Exclusivity clause

Term sheet foundation

FAQ

Frequently asked questions about Letter of Intent (LOI)

Generally no — an LOI expresses intent, not an obligation. Only clauses explicitly marked as binding (e.g. confidentiality, exclusivity) are enforceable.