Letter of Intent Term Sheet

A letter of intent is not a purchase agreement. It's a filter: a cheap way to find out whether you and the seller actually agree on the shape of the deal before either of you pays for full diligence, a drafted purchase agreement, or a lender's underwriting. This term sheet is the structure I use to get that agreement in writing.

Every negotiable term the article covers is here with a bracketed field: price and the method used to reach it, what's included and excluded, the seller's transition role and pay, redo responsibility, a non-compete in principle, contingencies, and exclusivity tied to a closing date. It also names, plainly, the handful of items that belong in the purchase agreement with your attorney instead of here.

What's inside#

• Ten sections: parties, price and method, what's included and excluded, the seller's transition, redo responsibility, non-compete in principle, contingencies, exclusivity and timeline, items left to counsel, and signatures
• A bracketed field for every number, date, and choice the LOI needs to settle
• The same document as an editable Word file and a print-ready PDF

How to use it#

1. Fill in the bracketed fields with your own deal's numbers before you send anything to the seller.
2. Check the boxes that apply in the transition, redo, and contingency sections rather than leaving them ambiguous.
3. Confirm which clauses are binding with your attorney before either side signs.
4. Send the finished draft to your attorney to turn into the actual purchase agreement; this term sheet is a starting structure, not the final contract.