What Is Included In A Letter of Intent? As it pertains to the buying and selling of an early education company (childcare centers or schools), a Letter of Intent ("LOI") is a written statement expressing the intention of the participating parties to enter into a formal agreement. A LOI is not a formal agreement or a binding contract. The LOI serves the very important purpose of defining the agreed upon terms of a transaction so there are no misunderstandings between the parties, but it does not provide the detail found in a Purchase Sale Agreement.
Stipulations allowing buyer to adjust the purchase price in the event that: 1) undisclosed liabilities come due after settlement, and 2) actual inventory purchased does not match amount specified in sale agreement. Provisions that the business passes any and all necessary inspections, Provisions that final sale is contingent on verification of financial statements, license and lease transfers, Provisions that final sale is contingent on obtaining financing for purchase, Restrictions on business operations until final settlement, Non_competition and advisory clauses (these are sometimes arranged in a separate document), Allocation of purchase price