Structuring MOUs, LOIs, Term Sheets and Other Preliminary Agreements

Avoiding Unintended Performance or Financial Obligations and Limiting Drafting Ambiguity

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


Conducted on Wednesday, November 15, 2017

Recorded event now available

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Program Materials

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 that is 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.

Description

Preliminary agreements – commonly referred to as LOIs, MOUs or term sheets – are often used particularly: (1) when parties contemplating a transaction want to establish a confidential relationship before the transaction; (2) when parties to a potential transaction want to establish baseline business terms; or (3) when the timeline for an intended transaction is prolonged such that contingencies that might permit termination are uncertain.

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

Typically, LOIs, MOUs and term sheets are meant to evidence parties’ intent to do something in the future. While meant to show good faith rather than “final” contract documents, ambiguity and differing intentions can result in a dispute. Where preliminary agreements fall on the spectrum of binding or non-binding agreements depends on the provisions in the specific agreement. Courts look at multiple factors in finding whether the provisions in a preliminary agreement are 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.

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Outline

  1. Legal and commercial risks of LOIs, MOUs and term sheets
  2. Drafting methods and communications to minimize risks and clearly evidence intent

Benefits

The panel will review these and other key 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?

Faculty

Lu, May
May Lu

Shareholder
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, Esq.

Attorney Morris A. Nunes

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

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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

48 hours after event

$297

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48 hours after event

$297