LETTER OF INTENT

This Letter of Intent allows two parties to set up guidelines for negotiating an elaborate agreement, and explains the term, negotiations, definitive contract not required, non-exclusive relationship, costs and expenses, confidentiality, disclaimer, limitation of liability, publicity, and general boilerplate for a letter of intent.

Party 1 (You)

Name / Company

Individual / Company

Address 1

Address 2

City

State/Province

Zip

And Party 2 (Them)

Name / Company

Individual / Company

Address 1

Address 2

City

State/Province

Zip

Related Contracts

Letter of Authorization (For Goods and Services Subject to Confidentiality and Limitation of Liability)

Sample Letter Agreement (For Get Started Work)

Sample Letter of Agreement (For Retention Pay)

Question 1 of 11

Question 2 of 11

Question 3 of 11

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Question 7 of 11

Question 8 of 11

Question 9 of 11

Question 10 of 11

Question 11 of 11

1 Addressee

ADDRESSEE - Who is this Agreement being sent to?

2 Definitive Contract

DEFINITIVE CONTRACT TITLE - What is the name/title of the Definitive Contract?

3 Definitive Contract

DEFINITIVE CONTRACT TITLE - What is the business purpose of the Definitive Contract?

4 Term

TERM - LENGTH (Days) - How long is the term of the Agreement?

Term length in days.

How many days?

	30 days 30 days
	60 days 60 days
	90 days 90 days

I will specify how long.

How long?

5 Confidentiality Agreement

CONFIDENTIALITY AGREEMENT REFERENCE - What is the title and effective date of the Confidentiality Agreement?

8 Subcontractors

SUBCONTRACTORS - Can one or both of the parties subcontract any responsibilities?

	Party-1 can subcontract with Party-2's consent, and Party-2 can subcontract without Party-1's consent. Party-1 may not subcontract any obligation under this Agreement without Party-2's prior written consent. Party-2 can subcontract without Party-1's consent. Each party is responsible for its subcontractors' compliance with and breach of this Agreement as if the subcontractors' acts and omissions were the party's own.
	Party-2 can subcontract with Party-1's consent, and Party-1 can subcontract without Party-2's consent. Party-2 may not subcontract any obligation under this Agreement without Party-1's prior written consent. Party-1 can subcontract without Party-2's consent. Each party is responsible for its subcontractors' compliance with and breach of this Agreement as if the subcontractors' acts and omissions were the party's own.
	Either party can subcontract with the other party's consent. Neither party can subcontract any obligation under this Agreement without the other party's prior written consent. Each party is responsible for its subcontractors' compliance with and breach of this Agreement as if the subcontractors' acts and omissions were the party's own.
	Both parties can subcontract without the other party's consent. Both parties are free to subcontract their obligations under this Agreement. Each party is responsible for its subcontractors' compliance with and breach of this Agreement as if the subcontractors' acts and omissions were the party's own.
	No subcontracting. The parties may not subcontract any of their obligations under this Agreement.

9 Governing Law

GENERAL - GOVERNING LAW - Which state or country's laws govern this contract?

10 Forum, Venue or Jurisdiction

GENERAL - FORUM - Which state or country is the forum for this contract?

11 Assignment

GENERAL - ASSIGNMENT - Do I want both parties to be able to assign this Agreement, just Party-1, or not allow any assignments?

Both parties.

Broad right to assign.

Any of the parties may assign, delegate, sublicense or otherwise transfer this Agreement, or any right or obligation under this Agreement, to a third party.

Limited right to assign to a third party buying a party's (to this Agreement) shares or assets.

This Agreement is not assignable, delegable, sublicenseable or otherwise transferable by any party in whole or in part without the prior written consent of the other party (or parties). Any transfer, assignment, delegation or sublicense by a party without such prior written consent is invalid. However, any party may assign this Agreement to a third party purchasing: (a) majority control of the party's equity shares; or (b) all or substantially all of either (i) a party's assets or (ii) the assets of the party's relevant business unit under this Agreement.

Just Party-1.

Broad right to assign.

This Agreement is not assignable, delegable, sublicenseable or otherwise transferable by Party-2 in whole or in part without the prior written consent of Party-1. Any transfer, assignment, delegation or sublicense by Party-2 without Party-1's prior written consent is invalid. Party-1 may assign, delegate, sublicense or otherwise transfer this Agreement, or any right or obligation under this Agreement, to a third party.

Limited right to assign to a third party buying a party's (to this Agreement) shares or assets.

This Agreement is not assignable, delegable, sublicenseable or otherwise transferable by Party-2 in whole or in part without the prior written consent of Party-1. Any transfer, assignment, delegation or sublicense by Party-2 without Party-1's prior written consent is invalid. Party-1 may assign this Agreement. Party-1 may assign this Agreement to a third party purchasing all or substantially all of Party-1's assets or the assets of the relevant Party-1 business unit under this Agreement.

No assignments.

This Agreement is not assignable, delegable, sublicenseable or otherwise transferable by either party in whole or in part without the prior written consent of the other party. Any transfer, assignment, delegation or sublicense by a party without the other party's prior written consent is invalid.

The purpose of a term sheet is to create guidelines for negotiating a much longer, complex agreement at a later date. The longer, complex agreement is usually referred to in the term sheet as the "Definitive Agreement" or the "Definitive Contract."

The "Term" means how long the contract will be in force.

Sometimes, for convenience, parties will incorporate the requirements of a separately signed confidentiality agreement into another contract. This saves the parties the time and trouble of having to negotiate new confidentiality provisions every time they want to strike a new deal. Instead, the parties can just sign one confidentiality agreement at the start, and then incorporate its requirements by referring to it in each new agreement.

"Limitation of Liability" is a provision used to limit the kinds of damages a company could be liable for if sued. Parties often want to limit their liability for "Consequential Damages" which usually involves damages that are much larger than the money owed under the contract, and include lost profits and punitive damages. Parties may also want to impose a hard cap on their liability. For instance, a party could state that it won't be liable for more than $10,000, or for more than the fees under the contract.

"Limitation of Liability" is a provision used to limit the kinds of damages a company could be liable for if sued. Parties often want to limit their liability for "Consequential Damages" which usually involves damages that are much larger than the money owed under the contract, and include lost profits and punitive damages. Parties may also want to impose a hard cap on their liability. For insance, a party could state that it won't be liable for more than $10,000, or for more than the fees under the contract.

A "Subcontractor" is a third party who one of the signing parties wants to perform some of its responsibilities under the Agreement, such as providing a Service or Deliverable.

The "Governing Law" is the particular state or country's laws that you choose to apply to this contract. Often times, the governing law is the state or country within which one or both of the parties have a main office, or where they are conducting business under the contract.

"Forum", "Venue" or "Jurisdiction" refers to where disputes between the parties must be litigated. Often the parties will still be free to seek injunctions or other temporary relief outside of the forum as they see fit.

"Assignment" means the right to transfer the contract, or a right or obligation under the contract, to a third party. Usually, this is prohibited or limited to a third party buying the shares or assets of a party to the contract.

Comments:

July 30, 2010 (the "Effective Date")

,
("Party-1")

,
("Party-2")

Dear TEXTFIELD [QR-351]:

RE: Letter of Intent ("Agreement") between Party-1 and Party-2

The parties intend to negotiate regarding a [INSERT TEXT] contract (the "Definitive Contract") under which the following might (or might not) occur [INSERT TEXT]. The parties are entering into this Agreement to suggest provisions to be included in the Definitive Contract, which may or may not be ultimately executed by the parties. The parties agree as follows:

1. DEFINITIONS. The following terms as used in this Agreement have the following meanings:

1.1. "Government Authority" means any governmental authority or court, tribunal, agency, department, commission, arbitrator, board, bureau, or instrumentality of the United States of America or any other country or territory, or domestic or foreign state, prefecture, province, commonwealth, city, county, municipality, territory, protectorate or possession.

1.2. "Law" means all laws, statutes, ordinances, codes, regulations and other pronouncements having the effect of law of any Government Authority.

2. TERM. The term of this Agreement shall commence upon the Effective Date and expire at 5:00 p.m. in Party-1's address's time zone 30 days [QR-352] later (the "Term").

3. NEGOTIATIONS. Using the suggested provisions of Exhibit A for illustrative purposes only, the parties will negotiate in good faith in an attempt to agree to terms of the Definitive Contract, setting forth all rights and obligations of the parties.

4. DEFINITIVE CONTRACT NOT REQUIRED. Nothing in this Agreement shall be construed to require the parties to enter into the Definitive Contract. The Definitive Contract will be binding upon the parties only after all of its provisions are successfully negotiated between the parties and they have executed the Definitive Contract. The parties agree to be bound by the sections entitled "Definitive Contract Not Required", "Costs and Expenses", "Confidentiality", "Disclaimer", "Limitation of Liability", "Publicity" and "General" of this Agreement. Except for such sections, it is expressly understood by the parties that this Agreement (including, without limitation, Exhibit A) is for illustrative purposes and does not create any obligations: (a) for either party; and (b) as to the provisions of a Definitive Contract.

5. NON-EXCLUSIVE. During the Term, Party-1 and Party-2 each remain free to pursue similar arrangements with other entities independently, and may pursue opportunities independently or with others that may be competitive with an opportunity pursued by Party-1 and Party-2 cooperatively. Party-1 and Party-2 will each be free to make their respective products, services and offerings available to any third parties.

6. COSTS AND EXPENSES. Each party shall bear its own costs and expenses incurred in connection with this Agreement and the transactions contemplated, whether or not the Definitive Contract is signed by the parties.

7. CONFIDENTIALITY. There is a separate signed confidentiality agreement between the parties, with the following title and effective date: [INSERT TEXT] (the "Confidentiality Agreement"). The provisions of the Confidentiality Agreement are incorporated by reference into this Agreement and apply to all disclosures of Confidential Information (as defined in the Confidentiality Agreement) under this Agreement. If there is any conflict or ambiguity between the Confidentiality Agreement and this Agreement, this Agreement governs and controls. This Agreement constitutes Confidential Information of both parties under the Confidentiality Agreement.

8. DISCLAIMER. ALL INFORMATION, MATERIALS, SERVICES OR DELIVERABLES PROVIDED UNDER THIS AGREEMENT BY ONE PARTY TO THE OTHER PARTY, OR TO A THIRD PARTY, ARE PROVIDED ON AN AS-IS BASIS WITHOUT ANY WARRANTIES, REPRESENTATIONS OR COVENANTS OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.

9. LIMITATION OF LIABILITY. THIS LIMITATION OF LIABILITY PROVISION APPLIES IN THE AGGREGATE AND NOT ON A PER CLAIM BASIS, WHETHER ANY DAMAGES ARE CHARACTERIZED IN TORT, NEGLIGENCE, CONTRACT, OR OTHER THEORY OF LIABILITY, REGARDLESS OF WHETHER A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF OR COULD HAVE FORESEEN ANY DAMAGES, AND IRRESPECTIVE OF ANY FAILURE OF ESSENTIAL PURPOSE OF A LIMITED REMEDY. THIS LIMITATION OF LIABILITY PROVISION DOES NOT LIMIT A PARTY'S LIABILITY FOR GROSS NEGLIGENCE, INDEMNIFICATION OBLIGATIONS, BREACH OF CONFIDENTIALITY REQUIREMENTS, INTENTIONAL MISCONDUCT, INTENTIONAL TORTS AND INTENTIONAL VIOLATIONS OF LAW. NEITHER PARTY IS LIABLE TO THE OTHER OR ANY THIRD PARTY UNDER THIS AGREEMENT FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RESULTING FROM THIS AGREEMENT. [QR-33] EACH PARTY'S LIABILITY SHALL NOT EXCEED THE AMOUNTS PAID UNDER THIS AGREEMENT IN THE ONE (1) YEAR PERIOD PRIOR TO THE DATE THE CLAIM AROSE. [QR-34]

10. PUBLICITY. Each party agrees to not make, publish or distribute (whether in print, electronically or otherwise) any public announcements, press releases, advertising, marketing materials or promotional materials regarding the execution or performance of this Agreement without the prior written consent of the other party.

11. GENERAL. Entire Agreement and Amendments. This Agreement is the entire agreement between the parties and supersedes all earlier and simultaneous agreements regarding the subject matter, including, without limitation, any invoices, business forms, purchase orders, proposals or quotations. This Agreement may be amended only in a written document, signed by both parties. Independent Contractors, Third Party Beneficiaries, and Subcontractors. The parties acknowledge that they are independent contractors under this Agreement, and except if expressly stated otherwise, none of the parties, nor any of their employees or agents, has the power or authority to bind or obligate another party. Except if expressly stated, no third party is a beneficiary of this Agreement. The parties may not subcontract any of their obligations under this Agreement. [QR-63] Governing Law and Forum. All claims regarding this Agreement are governed by and construed in accordance with the Laws of TEXTFIELD [QR-27], applicable to contracts wholly made and performed in such jurisdiction, except for any choice or conflict of Law principles, and must be litigated in TEXTFIELD [QR-28], regardless of the inconvenience of the forum, except that a party may seek temporary injunctive relief in any venue of its choosing. The parties acknowledge and agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement. Assignment. This Agreement binds and inures to the benefit of the parties' successors and assigns. Either party may assign, delegate, sublicense or otherwise transfer this Agreement, or any right or obligation under this Agreement, to a third party. [QR-46] No Waivers, Cumulative Remedies. A party's failure to insist upon strict performance of any provision of this Agreement is not a waiver of any of its rights under this Agreement. Except if expressly stated otherwise, all remedies under this Agreement, at Law or in equity, are cumulative and nonexclusive. Severability. If any portion of this Agreement is held to be unenforceable, the unenforceable portion must be construed as nearly as possible to reflect the original intent of the parties, the remaining portions remain in full force and effect, and the unenforceable portion remains enforceable in all other contexts and jurisdictions. Notices. All notices, including notices of address changes, under this Agreement must be sent by registered or certified mail or by overnight commercial delivery to the address set forth in this Agreement by each party. Captions and Plural Terms. All captions are for purposes of convenience only and are not to be used in interpretation or enforcement of this Agreement. Terms defined in the singular have the same meaning in the plural and vice versa.

If the foregoing is agreeable to Party-2, please execute the Agreement below.

Very truly yours,

PARTY-1

By: __________________________________
Print Name: ___________________________
Title: ________________________________

AGREED:

PARTY-2

By: __________________________________
Print Name: ___________________________
Title: ________________________________

EXHIBIT A
DEFINITIVE CONTRACT SUGGESTED PROVISIONS

The suggested provisions in this Exhibit A are for illustrative purposes only and nothing in this Exhibit A is binding upon either party. All references to "Agreement" in this Exhibit A are references to the Definitive Contract.

1. DEFINITIONS. The following terms as used in this Agreement have the following meanings:

2. ADDITIONAL PROVISIONS. The parties shall discuss whether to include the following additional provisions in the Agreement: [CHOOSE] [payment, warranty, indemnification, insurance, acceptance, distribution, export, audit, quality, recall, and inventory at termination requirements.]

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