Letter of Intent

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Starting a deal and all you have is a handshake right now? Take that handshake one step further with a Letter of Intent.

You’re hustling and working on landing that new client or business deal. You need to start sharing ideas and sketching out what the deal will look like, but you’re not ready to sign the contract just yet. So what do you do to protect your ideas, deal points, and information in the meantime? That’s where a Letter of Intent comes in.

More than a handshake, not yet the full contract - bridge the gap with a Letter of Intent.

Your Letter of Intent is not a binding agreement (at least not every part of it). It’s your handshake deal put down on paper, nicely organized with all the main points you want to eventually agree to. Think of it as your road map or business deal outline. You can include a description of the deal or project and the main financial points, like who’s getting paid or agreeing to contribute funds. You can also include any main conditions, like getting shareholder approval first before the deal will go ahead.

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Include binding promises you need today to protect yourself, take care of the rest tomorrow.

Letters of Intent are not binding, meaning neither person is tied to it, except for the parts you say are binding today. It’s quite common to put in some promises that both parties are agreeing to be bound by while you figure out the rest of the deal:

⇒ You can make your deal subject to a Confidentiality Agreement.

⇒ You can also include a non-solicitation clause, which means the other person is agreeing to not contact your customers for business or hire your employees and contractors.

⇒ Another promise you can include is a non-shop promise, which means the other person can’t use your offer to shop around for something better.

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