Letters of intent serve as crucial documents in business deals and agreements. They outline the key points of a planned arrangement before the final contract gets signed. These letters help both parties get on the same page about what they want to achieve.
You need to know how to write an effective letter of intent if you want to protect your interests and set clear expectations. The samples below show how to create these important documents for different situations. Keep reading to learn how to craft a binding letter of intent that works for your specific needs.
Binding Letters of Intent Samples
Here are fifteen carefully crafted binding letter of intent samples for various business situations.
1. Real Estate Purchase Letter of Intent
[Date]
[Sender’s Name]
[Sender’s Address]
[City, State ZIP]
[Phone Number]
[Email Address]
[Recipient’s Name]
[Recipient’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent to Purchase Property at [Property Address]
Dear Mr./Ms. [Recipient’s Last Name],
This letter states my intention to purchase the commercial property located at [full property address] for the amount of $[amount] subject to the terms and conditions outlined below.
Property Details:
- Property Address: [full address]
- Lot Size: [size]
- Building Size: [size]
- Zoning Classification: [classification]
Purchase Terms:
- Purchase Price: $[amount]
- Earnest Money Deposit: $[amount] to be paid within [number] days of acceptance
- Financing: [cash/financed with [percentage]% down payment]
- Due Diligence Period: [number] days from acceptance
- Closing Date: On or before [date]
Conditions:
- Satisfactory review of all property documents including title, survey, and environmental reports
- Physical inspection of the property
- Approval of financing (if applicable)
- Clear title free of all liens and encumbrances
This Letter of Intent shall be binding upon signature of both parties. Upon acceptance, my attorney will prepare a formal Purchase Agreement containing these terms and other standard provisions.
Please indicate your acceptance by signing below and returning a copy to me by [date].
Sincerely,
[Signature]
[Sender’s Name]
ACCEPTED AND AGREED:
[Signature Line for Recipient]
[Date Line]
2. Business Acquisition Letter of Intent
[Date]
[Sender’s Name]
[Sender’s Company]
[Sender’s Address]
[City, State ZIP]
[Recipient’s Name]
[Recipient’s Company]
[Recipient’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Acquisition of [Target Company]
Dear Mr./Ms. [Recipient’s Last Name],
This Binding Letter of Intent outlines the proposed terms for the acquisition of [Target Company] by [Buyer Company].
Transaction Structure:
[Buyer Company] proposes to acquire 100% of the outstanding shares/assets of [Target Company] for a total consideration of $[amount].
Purchase Price and Payment:
- Total Purchase Price: $[amount]
- Payment Structure: $[amount] at closing and $[amount] in [time period] following closing
- Escrow Amount: $[amount] to be held in escrow for [time period] to satisfy any post-closing adjustments or indemnification claims
Due Diligence:
[Buyer Company] will conduct due diligence over a period of [number] days from the date this letter is executed. This will include review of financial records, contracts, intellectual property, employment matters, and other aspects of the business.
Exclusivity:
[Target Company] agrees not to solicit or accept any other offers regarding the sale of the business for a period of [number] days from the execution of this letter.
Closing Conditions:
- Satisfactory completion of due diligence
- Negotiation and execution of a definitive purchase agreement
- Receipt of all necessary regulatory approvals
- Approval by the board of directors of both companies
- No material adverse change in the business or financial condition of [Target Company]
Timeline:
- Execution of Definitive Agreement: Within [number] days of this letter
- Closing: Within [number] days after signing the definitive agreement
This Letter of Intent is legally binding except for the sections pertaining to the consummation of the transaction, which remain subject to the execution of a definitive agreement.
Please confirm your acceptance by signing below and returning a copy by [date].
Respectfully,
[Signature]
[Sender’s Name]
[Sender’s Title]
AGREED AND ACCEPTED:
[Signature Line for Recipient]
[Date Line]
3. Joint Venture Letter of Intent
[Date]
[Sender’s Name]
[Sender’s Company]
[Sender’s Address]
[City, State ZIP]
[Recipient’s Name]
[Recipient’s Company]
[Recipient’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Joint Venture Between [Company A] and [Company B]
Dear Mr./Ms. [Recipient’s Last Name],
This letter states the intention of [Company A] to enter into a joint venture with [Company B] for the purpose of [describe purpose/project].
Joint Venture Structure:
- Legal Structure: [LLC/Corporation/Partnership]
- Ownership: [Company A] [percentage]% and [Company B] [percentage]%
- Initial Capitalization: $[amount] total, with [Company A] contributing $[amount] and [Company B] contributing $[amount]
Scope of the Joint Venture:
The proposed joint venture will focus on [detailed description of business activities]. The geographic scope will include [regions/countries].
Management and Control:
- Board Composition: [number] directors appointed by [Company A] and [number] directors appointed by [Company B]
- Day-to-day Management: [description of management structure]
- Key Decisions: Requiring [unanimous/majority] board approval
Contributions:
- [Company A] will contribute: [list assets, technology, personnel, etc.]
- [Company B] will contribute: [list assets, technology, personnel, etc.]
Profit Distribution:
- Profits will be distributed according to ownership percentages
- Dividend Policy: [description]
This Letter of Intent is binding upon both parties. Upon mutual agreement, counsel for both parties will draft a detailed Joint Venture Agreement incorporating these terms.
Please indicate your acceptance by signing below and returning a copy to me by [date].
Yours truly,
[Signature]
[Sender’s Name]
[Sender’s Title]
ACCEPTED AND AGREED:
[Signature Line for Recipient]
[Date Line]
4. Licensing Agreement Letter of Intent
[Date]
[Licensor’s Name]
[Licensor’s Company]
[Licensor’s Address]
[City, State ZIP]
[Licensee’s Name]
[Licensee’s Company]
[Licensee’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Licensing of [Technology/Product/IP]
Dear Mr./Ms. [Recipient’s Last Name],
This Binding Letter of Intent outlines the proposed terms for a licensing agreement between [Licensor Company] (“Licensor”) and [Licensee Company] (“Licensee”) for [Technology/Product/IP].
License Grant:
Licensor will grant Licensee a [exclusive/non-exclusive] license to [use/manufacture/sell/distribute] the [Technology/Product/IP] in the territory of [geographic scope] for a period of [duration].
Licensed Products:
The license will cover [detailed description of the technology, products, or intellectual property being licensed].
Financial Terms:
- Initial License Fee: $[amount] payable upon execution of the definitive license agreement
- Royalties: [percentage]% of Net Sales
- Minimum Annual Royalties: $[amount] per year
- Audit Rights: Licensor will have the right to audit Licensee’s books and records [frequency]
Term and Termination:
- Initial Term: [number] years
- Renewal Options: [description of renewal terms]
- Termination Rights: [list circumstances under which either party may terminate]
Performance Requirements:
Licensee must achieve the following minimum performance targets:
- Year 1: $[amount] in sales
- Year 2: $[amount] in sales
- Year 3: $[amount] in sales
This Letter of Intent is binding on both parties. Upon mutual agreement, a detailed License Agreement will be prepared.
Please confirm your acceptance by signing below and returning a copy by [date].
Sincerely,
[Signature]
[Licensor’s Name]
[Licensor’s Title]
ACCEPTED AND AGREED:
[Signature Line for Licensee]
[Date Line]
5. Manufacturing Agreement Letter of Intent
[Date]
[Sender’s Name]
[Sender’s Company]
[Sender’s Address]
[City, State ZIP]
[Recipient’s Name]
[Recipient’s Company]
[Recipient’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Manufacturing Agreement
Dear Mr./Ms. [Recipient’s Last Name],
This letter confirms the intention of [Customer Company] to enter into a manufacturing agreement with [Manufacturer Company] for the production of [product description].
Products:
[Manufacturer Company] will manufacture the following products according to [Customer Company]’s specifications:
- [Product 1]
- [Product 2]
- [Product 3]
Volume and Pricing:
- Minimum Annual Volume: [number] units
- Pricing: $[amount] per unit for the first [number] units, with a [percentage]% discount for volumes exceeding [number] units
- Price Adjustments: Prices may be adjusted annually based on [raw material costs/labor costs/inflation]
Quality Standards:
All products must meet the quality standards specified in [Customer Company]’s Quality Manual and pass quality control inspections before shipment.
Term:
- Initial Term: [number] years
- Renewal Terms: Automatic renewal for successive [number]-year periods unless terminated
Lead Times and Delivery:
- Standard Lead Time: [number] days from receipt of purchase order
- Rush Orders: [description of rush order terms]
- Shipping Terms: [FOB/CIF/etc.] [location]
This Letter of Intent is binding upon signature by both parties. A comprehensive Manufacturing Agreement will be prepared within [number] days.
Please indicate your acceptance by signing below and returning a copy to me by [date].
Kind regards,
[Signature]
[Sender’s Name]
[Sender’s Title]
ACCEPTED AND AGREED:
[Signature Line for Recipient]
[Date Line]
6. Merger Letter of Intent
[Date]
[Sender’s Name]
[Sender’s Company]
[Sender’s Address]
[City, State ZIP]
[Recipient’s Name]
[Recipient’s Company]
[Recipient’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Merger Between [Company A] and [Company B]
Dear Mr./Ms. [Recipient’s Last Name],
This Binding Letter of Intent sets forth the key terms for the proposed merger between [Company A] and [Company B].
Transaction Structure:
The proposed transaction will be structured as a [merger of equals/acquisition] through an exchange of shares.
Exchange Ratio:
Shareholders of [Company B] will receive [number] shares of [Company A] common stock for each share of [Company B] common stock they own.
Management and Governance:
- Board Composition: The board of the combined entity will consist of [number] directors from [Company A] and [number] directors from [Company B]
- Management Team: [details about key executive positions]
- Corporate Name: The combined entity will be named [proposed name]
- Headquarters: [location]
Due Diligence:
Both parties will conduct due diligence over a [number]-day period from the execution of this letter.
Conditions to Closing:
- Approval by shareholders of both companies
- Receipt of all necessary regulatory approvals
- Satisfactory completion of due diligence
- No material adverse change in either company
- Execution of a definitive merger agreement
Exclusivity:
Both parties agree not to solicit or entertain any other merger or acquisition proposals for a period of [number] days from the date of this letter.
This Letter of Intent is binding on both parties with respect to exclusivity, confidentiality, and good faith negotiations. The consummation of the merger remains subject to the execution of a definitive merger agreement.
Please confirm your acceptance by signing below and returning a copy by [date].
Yours sincerely,
[Signature]
[Sender’s Name]
[Sender’s Title]
AGREED AND ACCEPTED:
[Signature Line for Recipient]
[Date Line]
7. Distribution Agreement Letter of Intent
[Date]
[Supplier’s Name]
[Supplier’s Company]
[Supplier’s Address]
[City, State ZIP]
[Distributor’s Name]
[Distributor’s Company]
[Distributor’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Distribution Agreement
Dear Mr./Ms. [Recipient’s Last Name],
This letter outlines the intent of [Supplier Company] to appoint [Distributor Company] as an authorized distributor of [Supplier Company]’s products in the territory of [geographic area].
Products:
The distribution rights will cover the following product lines:
- [Product Line 1]
- [Product Line 2]
- [Product Line 3]
Territory and Exclusivity:
- Territory: [detailed description of geographic area]
- Exclusivity Status: [exclusive/non-exclusive] distribution rights
Financial Terms:
- Distributor Discount: [percentage]% off the suggested retail price
- Minimum Purchase Requirements: $[amount] per [quarter/year]
- Payment Terms: Net [number] days from date of invoice
Marketing and Support:
- [Supplier Company] will provide marketing materials, technical support, and training
- [Distributor Company] will spend at least [percentage]% of sales on local marketing activities
Term and Renewal:
- Initial Term: [number] years
- Renewal Options: Option to renew for additional [number]-year terms upon mutual agreement
Performance Criteria:
- Annual Sales Targets: [details of sales targets]
- Market Penetration Goals: [details of market penetration goals]
This Letter of Intent is binding upon both parties. A comprehensive Distribution Agreement will be prepared within [number] days of signing this letter.
Please indicate your acceptance by signing below and returning a copy to me by [date].
Best regards,
[Signature]
[Supplier’s Name]
[Supplier’s Title]
ACCEPTED AND AGREED:
[Signature Line for Distributor]
[Date Line]
8. Franchise Agreement Letter of Intent
[Date]
[Franchisor’s Name]
[Franchisor’s Company]
[Franchisor’s Address]
[City, State ZIP]
[Franchisee’s Name]
[Franchisee’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Franchise Agreement
Dear Mr./Ms. [Recipient’s Last Name],
This Binding Letter of Intent outlines the key terms for the proposed franchise agreement between [Franchisor Company] and [Franchisee Name].
Franchise Grant:
[Franchisor Company] intends to grant [Franchisee Name] the right to operate a [type of business] franchise under the [Brand Name] trademark at [proposed location].
Territory:
The protected territory will include [description of territory boundaries].
Financial Terms:
- Initial Franchise Fee: $[amount]
- Royalty Fee: [percentage]% of gross sales, payable [weekly/monthly]
- Marketing Fund Contribution: [percentage]% of gross sales
- Initial Investment Estimate: $[amount] to $[amount]
Term:
- Initial Term: [number] years
- Renewal Option: [number] additional terms of [number] years each, subject to certain conditions
Training and Support:
- Initial Training: [number] weeks at [location]
- Ongoing Support: [description of support services]
- Operations Manual: To be provided upon signing the Franchise Agreement
Site Selection and Development:
- Site Approval Process: [description]
- Development Timeline: Store to be opened within [number] days of signing the Franchise Agreement
This Letter of Intent is binding upon signature by both parties. The formal Franchise Agreement will be prepared within [number] days and must be executed within [number] days thereafter.
Please confirm your acceptance by signing below and returning a copy by [date].
Sincerely,
[Signature]
[Franchisor’s Name]
[Franchisor’s Title]
ACCEPTED AND AGREED:
[Signature Line for Franchisee]
[Date Line]
9. Construction Contract Letter of Intent
[Date]
[Client’s Name]
[Client’s Company]
[Client’s Address]
[City, State ZIP]
[Contractor’s Name]
[Contractor’s Company]
[Contractor’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Construction Project at [Project Location]
Dear Mr./Ms. [Recipient’s Last Name],
This Binding Letter of Intent confirms the agreement between [Client Company] and [Contractor Company] regarding the construction project at [project location/address].
Project Scope:
The project consists of [detailed description of the construction project], as outlined in the preliminary plans dated [date].
Contract Amount:
- Base Contract Sum: $[amount]
- Allowances: [list of allowances and their amounts]
- Contingency Fund: [percentage]% of base contract sum
Schedule:
- Commencement Date: [date]
- Substantial Completion Date: [date]
- Final Completion Date: [date]
- Liquidated Damages for Delay: $[amount] per day
Payment Terms:
- Deposit: [percentage]% upon signing the definitive agreement
- Progress Payments: Based on [percentage]% completion, paid [monthly/biweekly]
- Retainage: [percentage]% held until substantial completion
Insurance and Bonds:
- General Liability Insurance: $[amount] minimum coverage
- Builder’s Risk Insurance: Full replacement value
- Performance and Payment Bonds: [Required/Not Required]
Change Orders:
Any changes to the scope of work must be approved in writing and may result in adjustments to the contract amount and schedule.
This Letter of Intent is binding upon both parties. A detailed Construction Contract will be prepared within [number] days of signing this letter.
Please indicate your acceptance by signing below and returning a copy to me by [date].
Regards,
[Signature]
[Client’s Name]
[Client’s Title]
ACCEPTED AND AGREED:
[Signature Line for Contractor]
[Date Line]
10. Partnership Agreement Letter of Intent
[Date]
[Party A’s Name]
[Party A’s Company]
[Party A’s Address]
[City, State ZIP]
[Party B’s Name]
[Party B’s Company]
[Party B’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Business Partnership
Dear Mr./Ms. [Recipient’s Last Name],
This letter confirms our mutual intention to form a business partnership between [Party A] and [Party B] for the purpose of [partnership purpose].
Partnership Structure:
- Legal Form: [General Partnership/Limited Partnership/LLP]
- Ownership: [Party A] [percentage]% and [Party B] [percentage]%
- Capital Contributions: [Party A] will contribute $[amount] and [Party B] will contribute $[amount]
Business Operations:
- Business Name: [proposed name]
- Location: [address/location]
- Business Activities: [detailed description of activities]
Management and Decision Making:
- Day-to-day Management: [description of roles and responsibilities]
- Major Decisions: Requiring [unanimous/majority] approval
- Banking: [banking arrangements]
Profit and Loss Sharing:
- Profit Distribution: [Party A] [percentage]% and [Party B] [percentage]%
- Loss Allocation: [Party A] [percentage]% and [Party B] [percentage]%
- Draws and Salaries: [details of partner compensation]
Term and Dissolution:
- Term: [specific term/until dissolved by mutual agreement]
- Buyout Provisions: [details of buyout arrangements]
- Dispute Resolution: [mediation/arbitration provisions]
This Letter of Intent is binding upon both parties. A comprehensive Partnership Agreement will be prepared within [number] days of signing this letter.
Please confirm your acceptance by signing below and returning a copy by [date].
All the best,
[Signature]
[Party A’s Name]
ACCEPTED AND AGREED:
[Signature Line for Party B]
[Date Line]
11. Employment Agreement Letter of Intent
[Date]
[Employer’s Name]
[Employer’s Company]
[Employer’s Address]
[City, State ZIP]
[Prospective Employee’s Name]
[Prospective Employee’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Employment
Dear Mr./Ms. [Recipient’s Last Name],
[Employer Company] is pleased to offer you this Binding Letter of Intent regarding your employment as [Position Title] starting [Start Date].
Position and Duties:
- Title: [Position Title]
- Reporting To: [Manager’s Title]
- Main Responsibilities: [list of key responsibilities]
- Location: [Work Location]
Compensation and Benefits:
- Base Salary: $[amount] per year
- Bonus Structure: [description of bonus program]
- Equity: [description of stock options/grants, if applicable]
- Benefits: Health insurance, retirement plan, paid time off, and other standard company benefits
- Expense Reimbursement: According to company policy
Work Schedule:
- Hours: [Full-time/Part-time], [number] hours per week
- Work Schedule: [details of work schedule]
- Travel Requirements: [percentage]% of time
Term and Probation:
- Employment Type: [At-will/Fixed Term] for [duration]
- Probationary Period: [number] months
- Notice Period: [number] weeks/months
Confidentiality and Non-compete:
You will be required to sign a standard confidentiality agreement and non-compete agreement as a condition of employment.
This Letter of Intent is binding upon both parties. A detailed Employment Agreement will be prepared within [number] days of signing this letter.
Please indicate your acceptance by signing below and returning a copy by [date].
Yours truly,
[Signature]
[Employer’s Name]
[Employer’s Title]
ACCEPTED AND AGREED:
[Signature Line for Prospective Employee]
[Date Line]
12. Supply Agreement Letter of Intent
[Date]
[Buyer’s Name]
[Buyer’s Company]
[Buyer’s Address]
[City, State ZIP]
[Supplier’s Name]
[Supplier’s Company]
[Supplier’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Supply Agreement
Dear Mr./Ms. [Recipient’s Last Name],
This letter outlines the intention of [Buyer Company] to enter into a supply agreement with [Supplier Company] for the purchase of [products/materials].
Products and Specifications:
[Supplier Company] will supply the following products according to the specifications provided by [Buyer Company]:
- [Product 1]: [brief description and specifications]
- [Product 2]: [brief description and specifications]
- [Product 3]: [brief description and specifications]
Volume and Pricing:
- Annual Purchase Commitment: Minimum of [quantity] units per year
- Price: $[amount] per unit for Product 1, $[amount] per unit for Product 2, $[amount] per unit for Product 3
- Price Adjustments: Prices may be reviewed [quarterly/annually] and adjusted based on [raw material costs/market conditions]
Delivery Terms:
- Delivery Schedule: [weekly/monthly/as needed] deliveries
- Lead Time: [number] days from receipt of purchase order
- Shipping Terms: [FOB/CIF/etc.] [location]
Term:
- Initial Term: [number] years
- Renewal Options: Option to renew for additional [number]-year terms
Quality Assurance:
- Quality Standards: All products must meet the quality standards outlined in [document name]
- Inspection Rights: [Buyer Company] has the right to inspect goods upon delivery
- Warranty: [Supplier Company] warrants that all products will be free from defects for a period of [time period]
This Letter of Intent is binding upon signature by both parties. A comprehensive Supply Agreement will be prepared within [number] days.
Please confirm your acceptance by signing below and returning a copy by [date].
Best regards,
[Signature]
[Buyer’s Name]
[Buyer’s Title]
ACCEPTED AND AGREED:
[Signature Line for Supplier]
[Date Line]
13. Lease Agreement Letter of Intent
[Date]
[Tenant’s Name]
[Tenant’s Company]
[Tenant’s Address]
[City, State ZIP]
[Landlord’s Name]
[Landlord’s Company]
[Landlord’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent to Lease Commercial Space at [Property Address]
Dear Mr./Ms. [Recipient’s Last Name],
This Binding Letter of Intent confirms the agreement between [Tenant Company] (“Tenant”) and [Landlord Company] (“Landlord”) regarding the lease of commercial space at [Property Address].
Premises:
- Location: [detailed description of the space]
- Size: Approximately [number] square feet
- Use: [intended use of the space]
Lease Terms:
- Lease Term: [number] years
- Commencement Date: [date]
- Renewal Option: [number] option periods of [number] years each
Rent and Expenses:
- Base Rent: $[amount] per square foot per year
- Rent Increases: [percentage]% annual increase
- Security Deposit: $[amount]
- Operating Expenses: [triple net/modified gross/full service]
- Tenant’s Share of Operating Expenses: [percentage]%
Tenant Improvements:
- Improvement Allowance: $[amount] per square foot
- Landlord’s Work: [description of landlord’s improvements]
- Tenant’s Work: [description of tenant’s improvements]
Parking:
- Allocated Spaces: [number] spaces
- Parking Charges: $[amount] per space per month
This Letter of Intent is binding upon both parties. A formal Lease Agreement will be prepared within [number] days of signing this letter.
Please indicate your acceptance by signing below and returning a copy by [date].
Sincerely,
[Signature]
[Tenant’s Name]
[Tenant’s Title]
ACCEPTED AND AGREED:
[Signature Line for Landlord]
[Date Line]
14. Consulting Agreement Letter of Intent
[Date]
[Client’s Name]
[Client’s Company]
[Client’s Address]
[City, State ZIP]
[Consultant’s Name]
[Consultant’s Company]
[Consultant’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Consulting Services
Dear Mr./Ms. [Recipient’s Last Name],
This letter outlines the intent of [Client Company] to engage the services of [Consultant Company] for [description of consulting project].
Scope of Services:
[Consultant Company] will provide the following services:
- [Service 1]
- [Service 2]
- [Service 3]
- [Service 4]
Project Timeline:
- Start Date: [date]
- Completion Date: [date]
- Milestone Dates: [list key milestones and dates]
Compensation:
- Fee Structure: [hourly rate/fixed fee/retainer]
- Amount: $[amount] [per hour/total for project/per month]
- Payment Schedule: [details of payment schedule]
- Expenses: [policy on reimbursable expenses]
Deliverables:
- [Deliverable 1]: Due by [date]
- [Deliverable 2]: Due by [date]
- [Deliverable 3]: Due by [date]
Confidentiality:
Both parties agree to maintain the confidentiality of all information shared during the engagement.
Intellectual Property:
All work product created by [Consultant Company] during the engagement will be the property of [Client Company].
This Letter of Intent is binding upon signature by both parties. A detailed Consulting Agreement will be prepared within [number] days.
Please confirm your acceptance by signing below and returning a copy by [date].
Regards,
[Signature]
[Client’s Name]
[Client’s Title]
ACCEPTED AND AGREED:
[Signature Line for Consultant]
[Date Line]
15. Research and Development Agreement Letter of Intent
[Date]
[Company A’s Name]
[Company A’s Address]
[City, State ZIP]
[Company B’s Name]
[Company B’s Address]
[City, State ZIP]
Subject: Binding Letter of Intent for Research and Development Collaboration
Dear Mr./Ms. [Recipient’s Last Name],
This Binding Letter of Intent outlines the key terms for a Research and Development Agreement between [Company A] and [Company B] for the development of [technology/product].
Project Scope:
The parties will collaborate on research and development activities related to [detailed description of R&D project], with the goal of [project objectives].
Roles and Responsibilities:
- [Company A] will be responsible for: [list of responsibilities]
- [Company B] will be responsible for: [list of responsibilities]
Project Funding:
- Total Project Budget: $[amount]
- [Company A] Contribution: $[amount] [cash/in-kind]
- [Company B] Contribution: $[amount] [cash/in-kind]
- Additional Funding Sources: [description of grants or other funding]
Timeline:
- Project Start Date: [date]
- Phase 1 Completion: [date]
- Phase 2 Completion: [date]
- Project End Date: [date]
Intellectual Property:
- Background IP: Each party retains ownership of its pre-existing intellectual property
- Foreground IP: [jointly owned/owned by Company A/owned by Company B with license to the other]
- Patent Strategy: [description of patent strategy]
Commercialization:
- Commercial Rights: [description of each party’s rights to commercialize results]
- Revenue Sharing: [revenue sharing arrangement]
- Licensing to Third Parties: [terms for licensing to third parties]
This Letter of Intent is binding upon both parties. A comprehensive Research and Development Agreement will be prepared within [number] days.
Please indicate your acceptance by signing below and returning a copy by [date].
Sincerely,
[Signature]
[Company A’s Representative Name]
[Company A’s Representative Title]
ACCEPTED AND AGREED:
[Signature Line for Company B’s Representative]
[Date Line]
Wrap-up About Binding Letters of Intent
The letters of intent shown here give you a starting point for your own binding letters. Each sample can be adjusted to fit your specific situation. The key points to focus on are clear terms, specific details about what each party will do, and making sure all important conditions are spelled out.
Good binding letters of intent help prevent confusion and disagreements down the road. They make the final contract process go more smoothly because everyone already understands the main points of the agreement.
Take time to create a detailed letter of intent that protects your interests while clearly stating what you expect from the agreement. With these samples as guides, you can craft an effective binding letter of intent for any business situation you face.