A Letter of Intent for Supplier is commonly used in commercial relationships governed by English and Welsh law when parties wish to formalize their intentions before executing a detailed supply agreement. This document typically precedes more comprehensive contracts and helps establish the fundamental terms of the proposed relationship. It outlines key commercial points, timelines, and any preliminary commitments, while providing a framework for further negotiation. While primarily non-binding, certain provisions such as confidentiality and exclusivity can be made explicitly binding. The document serves as a crucial step in complex supply arrangements where detailed due diligence or negotiations are required.
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1. Sender Details: Full name and address of the party sending the letter of intent
2. Recipient Details: Full name and address of the intended supplier
3. Date: Date of the letter
4. Subject Line: Clear identification of document as Letter of Intent and brief project/supply reference
5. Purpose Statement: Opening paragraph stating the intent to enter into a formal agreement for specified goods/services
6. Project Overview: Description of the proposed scope of supply or services
7. Key Commercial Terms: Overview of principal commercial arrangements including pricing, payment terms, and delivery expectations
8. Timeline: Expected dates for negotiations, due diligence, and formal agreement execution
9. Binding Terms: Clear statement of which terms are intended to be legally binding
10. Signature Block: Space for authorized signature and date
1. Exclusivity: Terms regarding exclusive negotiation period, used when parties want to prevent negotiations with other potential partners
2. Due Diligence: Framework for information sharing and verification process, included when preliminary investigations are required
3. Confidentiality: Terms regarding treatment of confidential information, included when sensitive information will be shared
4. Break Fee: Terms regarding compensation if either party withdraws, used in high-value or complex arrangements
5. Costs: Agreement on who bears the costs of negotiations and due diligence
6. Governing Law: Specification of applicable law and jurisdiction, important for cross-border arrangements
1. Term Sheet: Detailed summary of key commercial terms and conditions proposed for the final agreement
2. Project Timeline: Detailed breakdown of projected dates and milestones
3. Initial Specification: Preliminary technical or operational specifications for the goods or services
4. Due Diligence Requirements: List of required documentation and information for due diligence process
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