Free Memorandum of Understanding

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Memorandum of Understanding

QGtype


Buying real estate
Buying a business
Buying assets
Buying shares
Entering into a partnership
Other

This Memorandum of Understanding is not binding on either party and is only an expression of an intent to continue negotiations in good faith.



Your Memorandum of Understanding

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MEMORANDUM OF UNDERSTANDING

THIS MEMORANDUM OF UNDERSTANDING (the "Document") made as of this ________ day of ________________, ________ (the "Execution Date"),

BETWEEN:


____________________ of _________________________

(the "Purchaser")

- AND -


____________________ of _________________________

(the "Seller").

BACKGROUND:

  1. The Seller is the owner of residential property that is available for sale.
  2. The Purchaser wishes to purchase residential property from the Seller.

This Document will establish the basic terms to be used in a future real estate contract for sale ("the Contract") between the Seller and the Purchaser. The terms contained in this Document are not comprehensive and it is expected that additional terms may be added, and existing terms may be changed or deleted. The basic terms are as follows:

  1. Non-Binding
  2. This Document does not create a binding agreement between the Purchaser and the Seller and will not be enforceable. Only the future Contract, duly executed by the Seller and the Purchaser, will be enforceable. The terms and conditions of any future Contract will supersede any terms and conditions contained in this Document. The Seller and the Purchaser are not prevented from entering into negotiations with third parties with regard to the subject matter of this Document.
  3. Transaction Description
  4. The property (the "Property") that is the subject of this Document is located at:
    • ___________________________________________________________
      ___________________________________________________________
      ___________________________________________________________
      ___________________________________________________________
  5. Purchase Price
  6. The Purchaser will pay to the Seller the amount of £0.00 GBP on or before the 17th day of August, 2019 (the "Closing Date") as final payment in full for the Property.
  7. The Purchaser will take possession of the Property on the 17th day of August, 2019.
  8. Real Property Disclosure
  9. The Seller does not know of any material facts that would affect the value of the Property, except those observable by the Purchaser or known to the Seller and stated in this Document.
  10. Representations
  11. The Seller represents and warrants that the Property is free and clear of any liens, charges, encumbrances or rights of others which will not be satisfied out of the sales proceeds. If the representations of the Seller are untrue upon the Closing Date, the Purchaser may terminate any future agreement without penalty and any deposits must be refunded.
  12. Terms and Conditions
  13. The Purchaser accepts the Property in its current state and condition without any further work, repairs, treatments or improvements.

This Document accurately reflects the understanding between the Seller and the Purchaser, signed on this ________ day of ________________, ________.



___________________________
____________________ (Purchaser)



___________________________
____________________ (Seller)

Letter of Intent Information

Alternate Names:

A Letter of Intent is also called a/an:

  • LOI
  • Memorandum of Understanding
  • MOU
  • Negotiation Agreement
  • Term Sheet

What is a Letter of Intent?

A Letter of Intent (LOI) is a document that is typically used to preface a transaction and to ensure that all the parties involved are in understanding of one another. In the letter, one party makes their interests and objectives known and typically agrees to continue negotiations in the future.

An LOI provides the contact information of all parties involved, some basic terms of the proposed agreement, and the deadline (known as the closing date) by which the parties expect to sign a binding agreement.

LawDepot's Letter of Intent can be customised for:

  • England
  • Northern Ireland
  • Scotland
  • Wales

When should you use a Letter of Intent?

You should use a Letter of Intent when you would like to express your interest in pursuing a business transaction (like purchasing a product or proposing a business partnership) but have not yet begun or finished negotiating the terms of a formal agreement.

For example, you can use an LOI when you are interested in:

  • Purchasing real estate
  • Purchasing a business
  • Merging or acquiring businesses
  • Selling goods or services
  • Borrowing or lending money
  • Entering into a business partnership

LawDepot's Letter of Intent template is intended for use in business transactions, but can also be used for personal transactions like lending money to a friend or family member.

Is a Letter of Intent legally binding?

Unlike a formal agreement, a Letter of Intent typically does not impose obligations or assert rights other than the willingness to discuss the terms of a future agreement.

Although a Letter of Intent could be drafted to be binding, LawDepot's Letter of Intent is not designed to be a legally binding document; instead, it provides a structure for parties to negotiate freely and without the fear of being bound to any terms.

For instance, a business might use an LOI to set the parameters of a business merger or acquisition. While a typical contract might establish the specific terms of the business agreement, an LOI can set expectations for negotiating terms—without getting into the fine details.

How long does a Letter of Intent last?

A Letter of Intent can last for as long as the parties need to negotiate. You can set a closing date (i.e. the deadline for the parties to enter a formal agreement or end negotiations) in your LOI, but this date is more flexible than fixed. The closing date is merely a suggested time frame in which parties expect to end their communications.

Every business is different in its size, complexity, and due diligence requirements, so the closing date should give each party (depending on their particular situation) a reasonable amount of time to evaluate the offer in a Letter of Intent.

Related Documents:

  • Bill of Sale: documents the transfer of property ownership from one party to another
  • Joint Venture Agreement: outlines the duties and obligations of each business partner as they set out to complete a mutual goal or project
  • Loan Agreement: documents a borrower’s promise to repay a money loan within a particular time frame and according to a payment plan
  • Non-Disclosure Agreement: protects the sensitive and confidential information that is discussed between two parties in an agreement
  • Non-Compete Agreement: prevents unfair competition between two parties, especially when one party gains sensitive and confidential information from the other
  • Partnership Agreement: outlines the rights and responsibilities of each general partner in a business, including financial details such as profit and loss distribution
  • Purchase of Business Agreement: transfers the ownership of a business, including all of its shares and/or assets, from a seller to a buyer
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