Business Purchase Letter of Intent Template (US)
Updated on September 24, 2026
A business purchase letter of intent is supposed to slow the parties down just enough to decide whether a real acquisition agreement is worth drafting. The Jotform source does the opposite in places: it says the letter is non-binding, but it also repeats exclusivity and confidentiality in ways that could create confusion about what survives and what does not.
This US master makes the binding map visible. Purchase price, structure, assets, due diligence findings and anticipated closing are expressions of current intent unless the parties later sign a definitive agreement. Confidentiality, exclusivity, expenses, governing law, return of information and announcements can be binding now if the parties choose them. That split is the whole document.
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Business Purchase Letter of Intent
- Date:
- Buyer:
- Seller:
- Target business:
submits this letter of intent to outline the principal terms on which it is prepared to discuss the possible acquisition of from .
1. Non-binding transaction outline
The current proposed structure is . The proposed purchase price is , subject to due diligence, definitive documents, approvals, consents, tax review and any price adjustment agreed in the definitive agreement.
2. Binding and non-binding terms
The transaction outline, price, structure, timing and closing expectations are expressions of present intent only and do not require either party to buy or sell the business. The confidentiality, exclusivity, expenses, announcements, governing law and return-of-information terms are intended to bind the parties when this letter is signed.
3. Due diligence
will provide reasonable access during to financial statements, tax records, contracts, leases, employee information, permits, IP records, customer and supplier information, litigation materials and other records reasonably needed to evaluate the transaction. Access may be limited to advisers and named representatives.
4. Exclusivity
Until , will not solicit, encourage, negotiate or enter into another transaction for the sale of or substantially similar assets, except for exceptions expressly stated in a signed schedule.
5. Deposit or escrow discussion
6. Conditions to definitive agreement
The parties do not intend to sign a definitive purchase agreement unless these conditions are satisfied or waived: . Additional conditions may be added during diligence.
7. Confidentiality and announcements
Each party will use confidential information only to evaluate the possible transaction. Neither party may announce the discussions, contact employees or customers about the possible transaction, or use the other party name in public statements without prior written approval except as required by law.
8. Expenses and termination
Each party will pay its own costs unless a signed expense schedule says otherwise. This letter ends when the parties sign a definitive purchase agreement, mutually terminate discussions, or the diligence and exclusivity periods expire. Confidentiality and return-of-information duties survive termination.
9. Governing law
The binding parts of this letter are governed by . A definitive purchase agreement may choose a different governing law only if it says so expressly.
Buyer
Date signed:
Seller
Date signed:
Separate deal intent from binding process terms
A seller may be willing to share financial statements, customer information, employee data, lease files and tax material only if the buyer promises confidentiality and a serious timetable. A buyer may be willing to spend diligence money only if the seller stops shopping the business for a short period. Those promises can be binding even when the purchase itself is not.
The template therefore uses a binding-status schedule. It avoids accidental obligations to buy or sell while preserving the process commitments that make diligence possible. If a party wants price, structure or closing to be binding, it should not use a light LOI as a substitute for a purchase agreement.
Exclusivity needs dates and exceptions
The Jotform PDF says the seller agrees to an exclusive negotiation period until one date, then says exclusivity lasts until completion of due diligence and execution of the definitive purchase agreement. That is an avoidable conflict. A no-shop clause should have one start, one end, named exceptions and a remedy if the seller breaches it.
This template asks for a fixed exclusivity period and lets the seller preserve ordinary-course customer, supplier and employee conversations. It also leaves room for board fiduciary duties, lender discussions, unsolicited superior proposals or existing discussions where those exceptions are appropriate.
Due diligence should protect both sides
The buyer needs access to records, but the seller should not open every file without limits. Diligence should identify who may access the data room, what information is out of scope, whether personal data will be redacted, whether site visits are allowed, how employee contacts happen and when materials must be returned or destroyed.
This LOI adds a diligence request list and a confidentiality structure around it. That is especially important where the buyer is a competitor, where customer lists are valuable, where employee information is sensitive, or where trade secrets and pricing are shared before any definitive agreement exists.
Conditions precedent keep the LOI realistic
A headline price is not enough. A buyer may need financing, landlord consent, lender payoff, transferability of key contracts, satisfactory tax diligence, IP ownership evidence, clean lien searches and approval from members, directors or shareholders. A seller may need proof of funds, non-refundable expense reimbursement or a deposit held in escrow.
The template includes a conditions section so the parties can name the deal breakers early. It does not promise that the transaction will close; it records the path to a purchase agreement if diligence and approvals support it.
Announcements and expenses deserve their own lines
Business sale rumors can unsettle employees, customers, lenders and suppliers. A good LOI says who may announce discussions, when public statements are allowed, who answers employee questions and whether the buyer can contact customers or suppliers before signing. Silence on that point can damage the business before a deal exists.
Expenses also need direct treatment. Each side usually pays its own advisers unless the letter says otherwise. If a break fee, diligence deposit, escrow or expense reimbursement is intended, it should be drafted plainly rather than hidden inside a general purchase-price paragraph.
Letter of intent clause guide
- Parties and target business
- Identifies the buyer, seller and business being considered.
- Non-binding transaction terms
- Describes the proposed structure, assets, price and timing without creating a present duty to close.
- Binding-status schedule
- Lists which parts bind now and which are expressions of intent only.
- Due diligence access
- Controls document requests, data room access, site visits, advisers and redactions.
- Confidentiality
- Protects business information, trade secrets, employee data and customer details shared before signing a purchase agreement.
- Exclusivity
- Optional no-shop period with one end date, exceptions and remedy.
- Conditions
- Names approvals, financing, consents, searches and diligence outcomes needed before definitive documents.
- Expenses and deposits
- States who pays diligence and legal costs and whether any deposit is refundable.
- Announcements
- Restricts press, employee, customer, lender and supplier communications.
- Termination and return of information
- Explains when the LOI ends and what happens to confidential materials.
US LOI checklist
A business purchase LOI is a pre-contract document. Its legal risk is accidental binding effect, mishandled diligence information and process promises that do not match the parties intent.
State what is binding and non-binding
Make purchase price, structure, assets and closing intent non-binding unless the parties deliberately want a present obligation. Make confidentiality, exclusivity and expenses binding only if that is intended.
Protect confidential and personal information
Limit data-room access, redact personal information where practical, restrict use to evaluating the transaction, and require return or destruction if the deal stops.
Define exclusivity once
Use one no-shop period, one end date and clear exceptions. Avoid the Jotform defect of conflicting exclusivity durations.
Do not treat tax allocation as an afterthought
If the LOI includes a proposed asset sale, flag Form 8594 and price allocation for the definitive agreement rather than leaving it for closing.
IRS Form 8594Preserve securities and financing review
If equity, securities, seller financing or investor introductions are involved, record them as conditions for professional review rather than binding commitments in the LOI.
Control announcements
Business sale talks can affect employees, customers and creditors. Require mutual approval before external announcements except where law, lender rules or fiduciary duties require disclosure.
Use a definitive agreement for closing terms
A letter of intent should not carry all representations, warranties, indemnities and transfer mechanics. Those belong in the business purchase agreement and closing documents.
How to complete this business purchase letter of intent
- Identify the parties and target. Name the buyer, seller and business or asset package under discussion.
- Mark binding status. Choose which terms bind now and which are only a proposed framework.
- Describe diligence. List records, site visits, data-room users, redactions and deadlines.
- Set exclusivity carefully. Use a short, dated no-shop period with any fiduciary or existing-discussion exceptions.
- List conditions. Name financing, approvals, consents, lien searches, tax review and satisfactory definitive documents.
- Sign before sharing sensitive records. Have authorized representatives sign before opening confidential financial, customer, employee or trade-secret files.
Frequently asked questions
Is a business purchase LOI legally binding?
It can be partly binding. This template makes the purchase terms non-binding by default while allowing confidentiality, exclusivity, expenses, governing law, announcements and return of information to bind immediately if selected.
What is the difference between an LOI and a purchase agreement?
The LOI records a proposed path and controls diligence. The purchase agreement is the definitive contract that transfers assets or ownership and includes warranties, indemnity, closing deliverables and payment mechanics.
How long should exclusivity last?
Long enough for focused diligence and drafting, but not open-ended. Many deals use a short period tied to data-room access and a definitive-agreement target date. The exact period depends on the size and complexity of the business.
Should the LOI include a deposit?
Only if the parties know how it will be held and whether it is refundable. A deposit without escrow instructions, refund conditions and default rules creates more confusion than comfort.
Can the buyer talk to employees or customers during diligence?
Only if the seller permits it. The LOI should say whether contacts are allowed, who supervises them and when broader announcements can be made.
Does the LOI need tax terms?
It should flag tax structure and allocation questions, especially in an asset sale, but detailed allocation and reporting language usually belongs in the definitive purchase agreement.
What if diligence reveals a problem?
The LOI should let the buyer stop negotiations if diligence is unsatisfactory, unless a separate binding obligation says otherwise. It should also require return or destruction of confidential materials.
Who pays legal and accounting costs?
Usually each side pays its own costs, but the LOI should state that clearly. If one side reimburses expenses or pays a break fee, draft the trigger and cap directly.
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Disclaimer
This template and guide are general information only, not legal, tax, accounting, securities, real-estate, employment, competition, lending, or regulatory advice. No attorney has reviewed your facts. Check current federal, state, local and industry rules before signing.
