ClauseryFree letter of intent template to buy a business (Word)
A letter of intent to buy a business or its assets: the price and how it is paid, an optional earn-out, due diligence, closing conditions, optional exclusivity, confidentiality and costs, with everything except those protections left non-binding.
No sign-up. Your answers stay in your browser. Who it is for: Buyers of small and mid-sized businesses, and their advisers, setting out an offer before lawyers draft the purchase agreement.
Updated · Word (.docx) · Free to use and adapt
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What is in the letter of intent (business purchase)
- Share purchase or asset purchase
- Price, paid at closing or in stages
- Optional earn-out
- Due diligence access and timetable
- Definitive agreement, target closing date and conditions as a list
- Optional exclusivity (no-shop) period
- Confidentiality, with an optional reference to an existing NDA
- Which paragraphs are binding
- Offer expiry date and signatures
Read the full template
This is the complete wording. [Labels] are filled in from your answers, and highlighted text only appears when it applies; hover over it to see when.
[Letter date]
[Recipient name]
[Seller name]
[Seller address]
Re: Letter of intent to acquire [Target name]
Dear [Recipient name],
This letter sets out the main terms on which [Buyer name] (the "Buyer") proposes to buy all of the shares inbuy the business and assets of [Target name] (the "Business") from [Seller name] (the "Seller").
Price
The proposed price is [Purchase price], to be paid in full at closingas follows: [Payment terms]. Up to a further [Earn out amount] will depend on the Business's performance after closing, on terms to be agreed in the definitive agreement. The price assumes the Business is delivered free of debt and with a normal level of working capital.
Due diligence
The Seller will give the Buyer and its advisers reasonable access to the Business's financial, legal, tax and operational records, premises and key staff. The Buyer expects to complete its review within [Due diligence days] days of the date the Seller signs this letter.
Definitive agreement and closing
The parties will negotiate in good faith a definitive purchase agreement containing the terms above and the warranties, indemnities and other terms usual for a transaction of this kind. The target closing date is [Target closing date]. Closing will depend on:
Repeated for each condition
- [Condition]
For [Exclusivity days] days after the Seller signs this letter, the Seller will not solicit, encourage or negotiate any other offer to buy the Business or any significant part of it, and will tell the Buyer promptly if it receives one.
Confidentiality and costs
Each party will keep this letter and all information it receives about the other confidential, as set out in the non-disclosure agreement between them dated [Nda date]. Each party will pay its own costs, whether or not the transaction goes ahead.
Legal effect
Apart from the exclusivity, confidentiality and costs paragraphs and this paragraph, which are binding, this letter is not a legally binding agreement. Neither party is obliged to complete the transaction unless and until a definitive agreement is signed. This letter is governed by the laws of [Governing law].
This proposal expires if the Seller has not signed and returned a copy of this letter by [Offer expiry date].
Yours sincerely,
____________________________
[Buyer signatory], for [Buyer name]
Agreed and accepted by [Seller name]:
____________________________ Date: ______________
The questions you answer
Clausery turns the template into a short questionnaire. Optional parts only appear when they apply.
| Question | Type | Asked when |
|---|---|---|
| Letter date | Date | Always |
| Recipient name | Short text | Always |
| Seller name | Short text | Always |
| Seller address | Long text | Always |
| Target name | Short text | Always |
| Buyer name | Short text | Always |
| Is share purchase | Yes / no | Always |
| Purchase price | Money | Always |
| Is paid at closing | Yes / no | Always |
| Payment terms | Long text | If “Is paid at closing” is no |
| Has earn out | Yes / no | Always |
| Earn out amount | Money | If “Has earn out” is yes |
| Due diligence days | Number | Always |
| Target closing date | Date | Always |
| Conditions For each item: Condition | Repeating group | Always |
| Include exclusivity | Yes / no | Always |
| Exclusivity days | Number | If “Include exclusivity” is yes |
| Has existing nda | Yes / no | Always |
| Nda date | Date | If “Has existing nda” is yes |
| Governing law | Short text | Always |
| Offer expiry date | Date | Always |
| Buyer signatory | Short text | Always |
How to use it
Open it
Click Fill it in now. The template opens in Clausery with its questionnaire ready.
Answer the questions
Work through the sections. Drafts save as you type, on your device.
Download the document
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Prefer to start from your own wording? Download the Word file, edit it, keep the {tags}, and upload it to Clausery. See the template syntax.
Questions
Is a letter of intent binding?
Usually only in part. This letter says the price and deal terms are not binding until a definitive agreement is signed, while exclusivity, confidentiality and costs are. Courts can still find a deal was agreed if the parties act as if it was, so keep the wording and your conduct consistent.
What is the difference between a letter of intent and an MOU?
Both record intentions before a final agreement. A letter of intent is usually a one-sided offer in letter form, common for buying a business or property; an MOU is usually a joint statement between two partners.
Is it really free?
Yes. The download is free, and filling it in with the Clausery app is free too, with unlimited documents. Library templates never count towards a plan limit, and no account or card is needed.
Is my information uploaded anywhere?
No. Clausery runs entirely in your browser. Your answers and the finished document are created and stored on your own device.
Is this legal advice?
No. These are general samples. Laws differ between countries and states, so have the wording reviewed for your situation before you rely on it.
Clauses in this template, explained
Guide: Is an MOU legally binding? How it differs from a contract
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This template is a general sample and not legal advice. Laws vary by jurisdiction; have it reviewed before use.