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The Contractual Letter of Intent is a crucial preliminary document in UAE business practices, used when parties are seriously considering entering into a significant business transaction but need to formalize their intentions before proceeding with detailed negotiations and due diligence. It serves as a roadmap for future negotiations while potentially including certain binding provisions such as confidentiality, exclusivity, and governing law clauses. In the UAE context, where business relationships are built on formal documentation and clear expressions of intent, this document carries particular significance. The Letter of Intent must be drafted in compliance with UAE Civil Code requirements and often includes considerations for Sharia law principles, making it distinct from similar documents in other jurisdictions. It's commonly used in mergers and acquisitions, joint ventures, real estate transactions, and major commercial dealings, providing a structured approach to preliminary agreements while protecting both parties' interests during the negotiation phase.

1. Letter Header: Date, addressee details, and reference number

2. Introduction: Formal greeting and identification of the parties

3. Purpose Statement: Clear statement of the intention to explore/negotiate the proposed transaction

4. Transaction Overview: Brief description of the proposed transaction or project

5. Key Commercial Terms: Outline of the principal commercial terms under consideration

6. Timeline: Proposed timeline for negotiations and completion of definitive agreements

7. Exclusivity: Statement regarding any exclusivity period for negotiations

8. Confidentiality: Terms regarding the confidential treatment of information exchanged

9. Costs and Expenses: Statement on who bears the costs of negotiations and due diligence

10. Non-Binding Nature: Clear statement about which provisions are non-binding vs. binding

11. Governing Law: Specification of UAE law as governing law

12. Signature Block: Space for authorized signatures and company stamps