Discover the Private Equity Term Sheet or Letter of Intend

A letter of intent (also known as a Letter of Intent or Term Sheet) is a non-legally binding document drawn up by the two parties involved in a transaction, listing the main points to be addressed.

The Letter of Intent is negotiated before a contract is signed, and defines the framework of the future relationship. It is the basic document for discussing and negotiating the terms of the transaction. It gives both parties a clear vision of mutual objectives and their respective rights and obligations.

Elements that can be included in a letter of intent include:- The terms and conditions of the transaction and financing mechanisms;- The rights and obligations of both parties, including reciprocal responsibilities and commitments;- How confidentiality is to be protected;- How responsibilities and obligations are to be handled in the event of conflict;- Terms of engagement and stipulations for setting up negotiation processes;- Responsibilities linked to improving the company's operations and performance;- Exit conditions: timeframe for completion and conditions for success;- provisions relating to non-competition clauses and intellectual property.

A letter of intent is one of the key documents at the origin of transactions, defining the terms of the deal and enabling both parties to move forward in their negotiations. The letter of intent is one of the most important documents to ensure the smooth running of transactions and guarantee optimum commercial success.