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The Letter of Intent for Dealership serves as a crucial preliminary step in establishing dealership relationships within the United Arab Emirates. This document is typically used when companies seek to expand their distribution network through authorized dealers, particularly in situations requiring detailed negotiation and due diligence. While not a binding dealership agreement, it establishes the framework for negotiations and demonstrates serious intent from both parties. The document must align with UAE Federal Law No. 3 of 2022 and related commercial regulations, particularly regarding commercial agency relationships. It typically includes proposed terms for territory rights, product lines, performance expectations, and exclusivity periods, while maintaining flexibility for final negotiations. This type of document is particularly important in the UAE market, where formal documentation of commercial intentions and compliance with local commercial agency laws are essential for business relationships.

1. Parties: Full legal names and addresses of both the principal company and the prospective dealer

2. Background: Brief context about the principal's business, products/services, and the intention to appoint the recipient as a dealer

3. Definitions: Key terms used in the letter including 'Territory', 'Products', 'Dealership Rights'

4. Proposed Business Relationship: Overview of the intended dealership arrangement, including territory and product range

5. Due Diligence: Process and timeline for conducting mutual due diligence

6. Key Commercial Terms: Outline of principal commercial terms including pricing structure, minimum purchase requirements, and performance targets

7. Exclusivity Period: Duration during which parties will negotiate exclusively with each other

8. Confidentiality: Obligations regarding confidential information exchanged during negotiations

9. Non-Binding Nature: Clear statement that the LOI is non-binding except for specific clauses (confidentiality, exclusivity, governing law)

10. Next Steps: Timeline and process for moving towards a final agreement

11. Governing Law: Specification of UAE law as governing law and relevant jurisdiction