Should the parties in a purchase or sale of a business have a letter of intent (LOI)?
New Jersey business transactions attorney, Harold I. Steinbach, explains why simple letters of intent are good practice, but not to make them binding.
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It’s a great question, to have or not to have I wish Hamlet would have asked that. There are two schools of thought; some people think it’s a great idea ’cause you at least know you have a deal. Some people feel why spend all that time negotiating it, it’s just yet another document and more cost. My philosophy is I like a simple one. You should be able to fit it on one to two pages of paper on the big issues. And I feel like if you can’t even agree to that, let’s just blow it up early and not put in all the time and money.