LOI Checklist


Does the LOI cover all of the points and issues discussed during the negotiation process?


Have we reviewed all previous checklists to verify that all those issues have been addressed in the LOI?


Does the LOI clearly describe:

  • What we are buying?
  • What we are not buying?
  • What liabilities we will assume?
  • What liabilities we will not assume?
  • What we will pay?
  • When we will pay it?
  • The terms and conditions of the payments?
  • Any contingencies on those payments?
  • Any consignment arrangements?
  • Any licenses or other ongoing relationships between buyer and seller?
  • Employment contracts or relationships?


Have we allowed anything to remain unaddressed or undefined?


Has a transition concept been included and does it address:


  • How will we handle the transfer of responsibility?
  • How will we handle open orders?
  • How will we handle new orders?
  • How will we handle transfer of distributors?
  • How will we handle transfer of customers?
  • How will we handle warranties?
  • How will we handle receivables?
  • How will we handle payables?
  • The amount of ongoing support the seller will provide and for how long?


Are representations and warranties addressed?


Have the date and conditions of closing been defined?


Have non-compete provisions been included?


Do we have agreement on confidentiality and announcements?


Will each party pay its own expenses including brokers, accountants, attorneys and consultants?


Is the beginning, magnitude and duration of due diligence defined?


Have we included a no-commitment to continue clause?


Have we included an expiration date for the LOI?


Have we included governing law provisions?


Have we included unilateral or bilateral termination fees?


Did we review all previous checklists?


Did we learn anything new or conflicting?


Is there anything here that makes us want to walk away?


Should we continue to the next step?