A letter of intent is a non-binding document that records the preliminary agreement of its parties to negotiate and draft all terms of a commercial contract, and eventually be signed by them, becoming a binding instrument. Each party has the right to cease discussions and negotiations without any obligation to sign the final contract.
Some provisions survive termination of the LOI, such as the confidentiality clause.
The parties may also agree in the letter of intent that neither party may exit the LOI before a certain timeline and if such an event occurs, the exiting party would be liable to compensate the other party.
Typically, after signing the letter of intent, the parties commence the due diligence process.
This document is intended for use in the United Arab Emirates.
This document is provided for reference only and is not intended to be, and should not be considered, legal advice. Determinations about whether this document will be appropriate in your particular situation or jurisdiction should be made after consultation with a legal counsel. Kanoony will not assume any legal liability that may arise from the use of this document.