Corporate M&A Professionals
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This group is for employees of strategic investors/corporates only that are involved in M&A transactions as part of an in-house M&A department, corporate development, strategy, finance function, etc.
LOI Binding or no?
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My company uses a letter of intent that does not say that it is binding, and does not say it is not binding. As a general rule, does that mean that the loi is not binding?
As a general rule, if your letter of intent (LOI) does not explicitly state whether it is binding or non-binding, it can create ambiguity and potentially lead to disputes. Typically, courts will look at the specific language and context of the LOI to determine the parties’ intent. However, to avoid any confusion, it’s best practice to clearly state in the LOI whether it is intended to be binding or non-binding.
For peace of mind and legal clarity, I recommend explicitly including a clause in your LOI that specifies its binding nature.
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