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Non_binding letters of intent for the purchase of a business or business assets should be drafted carefully, and may include most or all of the following elements: Total compensation offered, including breakdown (size of security deposit, down payment, seller_financed debt, bank debt), Warranties of clear and marketable title, A detailed list of all liabilities and assets to be purchased, Assurances of the validity and assumability of contracts (if applicable), Tax liability limitations, Operating condition of all equipment and machinery at time of purchase

Proceeding with a clear understanding and agreement in principle: The key elements of the LOI should be negotiated beforehand and can be used as a guideline to prepare the purchase agreement. It should state that, if all information during due diligence confirms what was represented, that the buyer intends to complete the purchase under certain conditions. The key elements should include:

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