{"componentChunkName":"component---src-templates-blog-post-ts","path":"/blog-bite-mergers-acquisitions-what-are-the-legal-obligations-of-a-non-binding-letter-of-intent/","result":{"data":{"site":{"siteMetadata":{"title":"Clausehound Blog","author":"Joshua Koudys"}},"markdownRemark":{"id":"ca4e678a-1084-509e-a261-3eb1ddf2bca0","excerpt":"This article posted on our partner site Mondaq.com  considers the parties’ obligation to reach a definitive agreement despite a letter of intent (LOI) that…","html":"<p><a href=\"http://www.mondaq.com/canada/x/534324/Contract+Law/How+Firm+Is+Your+Handshake+Letters+Of+Intent+In+MA\" target=\"_blank\" rel=\"nofollow noopener\">This article posted on our partner site Mondaq.com </a> considers the parties’ obligation to reach a definitive agreement despite a letter of intent (LOI) that states that the intent was non-binding.</p>\n<p>An agreement to agree is generally <em>unenforceable</em> when: 1) all essential terms have not been decided, and 2) the parties did not intend to be legally bound. Absence of good faith in negotiations may be considered despite a non-binding LOI. Canadian courts may extend a duty of good faith (honest and reasonable performance) to LOI’s.</p>\n<p>Parties are encouraged to take three (3) steps when drafting a non-binding LOI. First, state that parties have no contractual obligations. Second, explicitly state the non-binding nature of the LOI. Third, potentially restrict the possibility of recovering damages (e.g. exclude damages for lost profits).</p>","frontmatter":{"title":"Blog Bite: Mergers & acquisitions - what are the legal obligations of a non-binding letter of intent?","date":"November 09, 2017","description":"This article considers a parties obligation to reach a definitive agreement despite a letter of intent (LOI) that states that the intent was non-binding.","author":{"id":"alina@clausehound.com","first":"Alina","last":null,"bio":null,"image":null},"tags":["Term Sheet","Letter of Intent","Share Purchase Agreement","Blog Bites","Mondaq","Investor Term Sheet","Memorandum of Understanding"]}}},"pageContext":{"slug":"/blog-bite-mergers-acquisitions-what-are-the-legal-obligations-of-a-non-binding-letter-of-intent/","previous":{"fields":{"slug":"/blog-bite-what-is-the-nature-of-transaction-letters-of-intent/"},"frontmatter":{"title":"Blog Bite: What is the nature of transaction letters of intent?","tags":["Term Sheet","Letter of Intent","Share Purchase Agreement","Blog Bites","Mondaq"],"author":{"id":"alina@clausehound.com","first":"Alina","last":null}}},"next":{"fields":{"slug":"/blog-bite-what-does-material-change-mean-for-public-disclosure-in-ma-transactions/"},"frontmatter":{"title":"Blog Bite: What does “material change” mean for public disclosure in M&A transactions?","tags":["Letter of Intent","Share Purchase Agreement","Blog Bites","Mondaq"],"author":{"id":"alina@clausehound.com","first":"Alina","last":null}}}}}}