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Structuring MOUs, LOIs, Term Sheets, and Other Nonbinding Legal Documents

Avoiding Unintended Performance or Financial Obligations, Utilizing Express Disclaimer Language, and Limiting Drafting Ambiguity

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, April 19, 2023

Recorded event now available

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This CLE webinar will provide counsel with guidance on structuring letters of intent (LOIs), memoranda of understanding (MOUs), term sheets, and other preliminary legal documentation intended as only partially binding or even nonbinding in commercial transactions. The panel will review how courts have ruled on the interpretation and enforcement of these preliminary agreements, explain the potential risks associated with their use, and provide best practices for minimizing risks with careful drafting and wise communications.


Parties use preliminary agreements (LOIs, MOUs, or term sheets) (1) when parties contemplating a transaction want to institute a confidential relationship before the deal, (2) when parties to a potential transaction want to establish baseline business terms, or (3) when the timeline for an intended arrangement is such that contingencies for termination are uncertain.

LOIs, MOUs, and term sheets are commercially favored but can introduce significant risk if not drafted precisely. Risks include creating an obligation to perform a contract, the inability to enforce limited terms expected to be enforceable, and formal disputes or litigation.

Typically, parties mean LOIs, MOUs, and term sheets to evidence their intent to do something in the future. While intended to show good faith rather than "final" contract documents, ambiguity and differing intentions can result in a dispute. Whether preliminary agreements are binding or non-binding contracts depends on the provisions in the specific contract. Courts look at multiple factors in finding whether the language in an initial agreement is binding or non-binding.

Listen as our experienced panel of practitioners examines legal risks and best practices for structuring LOIs, MOUs, or term sheets to minimize disputes over whether the agreements are binding.



  1. Legal and commercial risks of LOIs, MOUs, and term sheets
  2. Negotiating tactics and considerations
  3. Drafting methods and key provisions to minimize risks and clearly evidence intent


The panel will review these and other high priority issues:

  • What types of risks are created by the use of such instruments?
  • What logic are courts using in ruling on these preliminary agreements?
  • How can counsel help clients minimize risk through effective drafting and precise communication?


Lu, May
May Lu

Tiffany & Bosco

Ms. Lu serves the transactional needs of businesses and their owners by assisting them with business formation,...  |  Read More

Nunes, Morris
Morris A. Nunes

Of Counsel

Mr. Nunes specializes in business counseling and transactional work. His practice focuses on representing and...  |  Read More

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