Seller's obligations and legal position: The seller is obliged to continue operating the business in a manner that is consistent with past practice and that he shall facilitate the purchaser's endeavors in obtaining finance from third parties. However, neither the purchaser nor the seller is under any obligation to complete the acquisition of the business until and unless the purchase acquires all permits, certificates, permissions and approvals as required ensuring the correct operation of the business by the purchaser. In addition, the purchaser should also have completed a due diligence investigation and satisfied himself/herself in this regard.
Date for settlement (may also include "drop dead" date at which both sides agree to discontinue negotiations) Business experts say, however, that most letters of intent are primarily concerned with delineating only the major terms of the transaction. Indeed, a small business owner who ends up negotiating numerous minor details in a letter of intent may as well skip the step entirely and proceed directly to a binding purchase and sale agreement.