The Letter of Intent for Dealership is a crucial preliminary document used in the Philippine business context when a manufacturer or principal company intends to appoint a dealer for their products or services. This document serves as a formal expression of interest and outlines the basic terms and conditions that will form the foundation of the future detailed dealership agreement. While primarily non-binding, it typically includes certain binding provisions such as confidentiality and exclusivity during negotiations. The document must comply with Philippine commercial laws, including the Civil Code of the Philippines and the Philippine Competition Act, particularly regarding distribution relationships and fair trade practices. It's commonly used when parties want to document their serious intention to enter into a dealership arrangement while allowing time for due diligence, detailed negotiations, and the preparation of comprehensive agreements.
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1. Date and Parties: Identification of the parties including full legal names, addresses, and company registration details for both the proposed principal/manufacturer and the proposed dealer
2. Background/Introduction: Brief context about the principal's business, products/services, and the intention to appoint the recipient as a dealer
3. Definitions: Key terms used in the letter that require clear definition, such as 'Territory', 'Products', 'Dealership Rights'
4. Purpose: Clear statement of intent to enter into a dealership arrangement, subject to conditions and further documentation
5. Proposed Terms: Outline of key commercial terms including territory, products/services covered, exclusivity (if any), and proposed duration
6. Conditions Precedent: Key conditions that need to be met before proceeding with the final dealership agreement
7. Timeline: Proposed schedule for negotiation, due diligence, and execution of the final dealership agreement
8. Non-Binding Nature: Clear statement that the LOI is non-binding except for specified clauses
9. Binding Provisions: Specific provisions that are intended to be binding, typically confidentiality, exclusivity during negotiation, and governing law
10. Signature Block: Space for authorized representatives of both parties to sign and date the letter
1. Initial Financial Terms: Include when parties want to document preliminary agreement on key financial terms such as pricing structures, payment terms, or minimum purchase requirements
2. Due Diligence Process: Include when specific due diligence requirements need to be outlined
3. Exclusivity Period: Include when parties agree not to negotiate with other potential partners for a specified period
4. Deposit Requirements: Include when an initial deposit or security payment is required as part of the dealership consideration
5. Preliminary Marketing Plans: Include when specific marketing or business development activities are expected during the negotiation period
6. Break Fee: Include when parties agree to compensation if one party withdraws from negotiations under specific circumstances
1. Product List: Preliminary list of products or services to be covered by the dealership
2. Territory Map: Visual representation or detailed description of the proposed territory
3. Initial Business Targets: Preliminary sales targets or business objectives
4. Timeline Schedule: Detailed timeline for negotiation and implementation milestones
5. Required Documentation: List of documents and requirements needed for due diligence and final agreement
Authors
Relevant legal definitions
Clauses
Relevant Industries
Automotive
Consumer Electronics
Industrial Equipment
Manufacturing
Retail
Technology
Telecommunications
Medical Devices
Construction Equipment
Agricultural Machinery
Fashion and Apparel
Food and Beverage
Pharmaceutical
Home Appliances
Sporting Goods
Relevant Teams
Legal
Sales
Business Development
Operations
Commercial
Corporate Strategy
Distribution
Channel Management
International Business
Compliance
Contract Administration
Relevant Roles
Chief Executive Officer
Managing Director
Business Development Manager
Sales Director
Commercial Director
Legal Counsel
Corporate Lawyer
Operations Manager
Distribution Manager
Channel Manager
Chief Commercial Officer
Regional Sales Manager
Franchise Development Manager
Business Unit Head
Chief Operating Officer
Contract Manager
Procurement Manager
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