Document background
The Business Acquisition Letter of Intent (LOI) is a crucial preliminary document in Australian business acquisitions that bridges the gap between initial discussions and the final purchase agreement. It is typically used after parties have reached a preliminary understanding but before conducting detailed due diligence and drafting definitive agreements. The LOI outlines key commercial terms, including proposed purchase price, transaction structure, exclusivity periods, and conditions precedent, while typically remaining non-binding except for specific provisions like confidentiality. Under Australian law, this document helps parties align their expectations, provides a framework for due diligence, and serves as a roadmap for the transaction, while offering certain legal protections during negotiations. It's particularly important in complex transactions where parties need to document their preliminary understanding before investing significant resources in due diligence and detailed negotiations.
