Is a Business Intentions Agreement legally binding?

It depends on wording. If the document expressly limits binding effect to specific clauses, only those clauses are enforceable. Courts look to intent, clear language, and consideration to determine binding obligations; include explicit binding language for any obligations meant to be enforceable.

Can this agreement be signed electronically?

Yes. Electronic signatures satisfy the ESIGN Act (15 U.S.C. ch. 96) and UETA where applicable, provided intent, consent, attribution, and retention are met. Certain exceptions may still require wet signatures per federal or state law.

Who should sign on behalf of a company?

An officer or individual with delegated authority should sign and indicate title. Verify signatory authority via corporate resolutions or an acceptable power of attorney to avoid later ratification disputes.

Do I need a notary or witnesses?

Most Business Intentions Agreements do not require notarization, but state or document-specific rules (e.g., deeds, some POAs) may. Check state requirements and include notary or witness steps when needed for recording or enforceability.

How do I correct mistakes after signing?

Prepare a written amendment signed by all parties or a corrective addendum that references the original agreement. For material changes, obtain fresh signatures and preserve the audit trail for both documents.

How long should I retain the executed agreement?

Keep records for the agreement term plus at least three years; industry rules may require longer retention (e.g., HIPAA six years, IRS three years). Preserve audit trails, timestamps, and signer authentication logs to support any future disputes.

Electronic Signature
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Miscellaneous
Business Intentions Agreement

Business Intentions Agreement

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Business Intentions Agreement

This Business Intentions Agreement ("Agreement") is made effective as of by and between:

Party A: Name Party A: Address Party B: Name Party B: Address

Recitals

WHEREAS, Party A is engaged in the business of and possesses resources, expertise, and personnel relevant to the matters contemplated herein;

WHEREAS, Party B is engaged in the business of and seeks to evaluate and potentially pursue a commercial arrangement with Party A in respect of the Scope of Work described below;

WHEREAS, the parties desire to set forth certain mutual understandings and procedures for negotiating a definitive agreement while preserving specified rights and obligations during the negotiation period.

Scope of Work

Description of Services / Project Scope

Payment Terms

The parties agree the consideration for the services described in the Scope of Work shall be as follows:

Total Estimated Amount Payment Schedule and Milestones Late Payment Fee

Term and Termination

Term: This Agreement shall commence on Start Date: and continue until End Date: unless earlier terminated in accordance with this Agreement.

Either party may terminate this Agreement without cause upon providing written notice no less than days prior to the intended termination date. Termination shall not relieve either party of obligations accrued prior to the effective date of termination.

Confidentiality

Each party acknowledges that in the course of discussions and performance of the Scope of Work it may receive Confidential Information of the other party. "Confidential Information" means non-public information, whether oral, written, or electronic, relating to business, financials, technology, customer data, pricing, trade secrets, or other proprietary information that a reasonable person would understand to be confidential.

Each receiving party shall: (a) hold Confidential Information in strict confidence and take reasonable measures to protect it; (b) use Confidential Information solely to evaluate and perform the Scope of Work; and (c) not disclose Confidential Information to any third party except to its employees, agents, or advisors on a need-to-know basis who are bound to protect such information. The obligations in this section shall survive termination or expiration of this Agreement for a period of years, except with respect to trade secrets, which shall be protected for so long as they remain trade secrets.

Binding Effect; Reliance

The parties expressly intend that, except for the Confidentiality provisions and any express payment obligations set forth herein, this Agreement is a statement of mutual intent to negotiate and is not intended to create binding legal obligations to consummate a transaction, enter into a definitive agreement, or to obligate either party to proceed, unless and until a definitive written agreement is executed by both parties. Notwithstanding the foregoing, the parties may elect in writing to convert any provision to a binding obligation.

Indemnities, limitations of liability, warranties, and the allocation of risks shall be addressed in any subsequent definitive agreement and are not established by this Agreement except as expressly stated herein.

Select if parties intend this Agreement to create binding obligations beyond confidentiality

The parties mutually agree that select provisions of this Agreement are binding as specified in a separate written schedule to be attached and agreed by both parties.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to its conflict of laws rules. The parties submit to the exclusive jurisdiction of the state and federal courts located in that State for resolution of disputes arising under this Agreement.

Entire Agreement

This Agreement, including any schedules or attachments executed by the parties, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings, proposals, negotiations, and communications, whether oral or written. Any amendment or modification of this Agreement must be in writing and executed by authorized representatives of both parties.

Miscellaneous

Each party represents and warrants that it has the full power and authority to enter into this Agreement and that the person signing below is authorized to execute this Agreement on its behalf. Any notices under this Agreement shall be in writing and delivered to the addresses listed above.

Party A:

By:

Date:

Party B:

By:

Date:

What the Business Intentions Agreement Is and When It’s Used

A Business Intentions Agreement records the preliminary commitments, scope outline, and expectations between parties before executing a final contract. It typically states the purpose, proposed deliverables, timelines, confidentiality terms, and whether the agreement is binding or non-binding. Organizations use it to align negotiations, preserve initial terms, and create a record for due diligence and internal approvals prior to detailed contract drafting.

Why a Clear Intentions Agreement Matters for Risk and Clarity

A well-drafted Business Intentions Agreement reduces misunderstandings, documents negotiation milestones, and preserves bargaining positions. It also clarifies whether parties intend to be bound, which limits litigation risk and speeds later contracting when expectations are already recorded.

Essential Elements Every Professional Business Intentions Agreement Should Include

Include the parties, scope, timeline, confidentiality, intended commitments, and signature blocks to make intent and responsibilities clear without prematurely creating full contractual obligations.

Parties

Full legal entity names and contact points for each party, including registration state and business type where applicable, to avoid identity mismatches later.

Purpose

A concise description of the proposed transaction or collaboration that frames later due diligence and guides subsequent contract drafting and exhibits.

Scope

High-level deliverables, responsibilities, and exclusions; avoid technical detail that belongs in the final agreement but be specific enough to guide expectations.

Timing

Key milestones, proposal effective date, and any exclusivity or negotiation windows that affect the parties’ obligations and rights during discussions.

Binding Clauses

Explicitly state whether the document is non-binding except for listed provisions (e.g., confidentiality, exclusivity, governing law, expenses).

Signatures

Identify authorized signatories, signature dates, and any witness or notary requirements the parties agree to follow for enforceability.

Who Typically Prepares and Signs a Business Intentions Agreement

Organizations use these agreements to document preliminary terms, route internal approvals, and protect negotiation confidentiality before a final contract.

Corporate development teams and legal counsels preparing initial transaction frameworks prior to definitive agreements.
Vendors and suppliers outlining pilot projects, scope, and pricing expectations before full procurement contracts.
Startups and investors documenting investment terms, exclusivity, and milestones during early fundraising or term sheet discussions.

Use the document with stakeholders who influence contractual terms, and ensure authorized signers are identified before execution to avoid later ratification issues.

Step-by-Step: How to Complete a Business Intentions Agreement

Follow these practical steps to complete, circulate, and secure signatures on a Business Intentions Agreement.

01

Draft: Record parties, purpose, scope, and key milestones clearly.
02

Clarify Binding Terms: List which clauses are binding, e.g., confidentiality or exclusivity.
03

Review: Legal and business teams confirm language and signatory authority.
04

Execute: Obtain authorized signatures and preserve audit trail.

Configuring an Online Signing Workflow for the Agreement

Set up a repeatable online workflow to collect signatures, authenticate signers, and store the executed agreement with its audit trail.

Field	Configuration
Signer Order	Define sequential or parallel signing as required.
Authentication	Choose email, SMS code, or stronger methods for signer verification.
Conditional Fields	Use conditional fields for optional clauses or exhibits.
Archive Settings	Enable secure storage with version control and audit logs.

Platform and File Format Considerations for Electronic Execution

Confirm the signing platform supports required file formats, signer authentication, and audit trails before sending any agreement for signature.

File Formats: PDF and DOCX are standard for retention and redaction workflows.
Integrations: Link to CRM or ERP systems like Salesforce or NetSuite for recordkeeping.
Authentication: Support email, SMS, and optional KBA where needed.

Ensure the provider meets necessary compliance standards (ESIGN, UETA, and industry-specific rules) and preserves the complete audit trail including timestamps and IP addresses to support enforceability.

Comparing eSignature Vendors for Signing a Business Intentions Agreement

Basic vendor differences relevant to executing this agreement include starting price, trial availability, bulk send capability, audit trail presence, HIPAA support, and envelope caps.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes (Premium)	Yes	Yes	Yes	Varies
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Security and Compliance Considerations for Electronic Execution

In-Transit Encryption: TLS 1.2/1.3

At-Rest Encryption: AES-256

Regulatory Certifications: SOC 2 Type II

Healthcare Compliance: HIPAA (BAA required)

FDA/Records: 21 CFR Part 11 support

Privacy Frameworks: GDPR and CCPA compliance

Key Risks and Legal Consequences of Errors

1099 Penalties: $60–$330+ per form (IRC §6721)

Backup Withholding: 24% withholding for missing/incorrect TIN

I-9 Violations: $281–$2,789 per violation (8 CFR §274a.2)

Invalid Signature: Enforceability dispute risk if attribution fails

Data Breach Cost: Regulatory fines and remediation expenses

Intentional Misstatement: Higher statutory penalties and reputational harm

Common Preparation Errors to Avoid

Leaving the binding vs non-binding status ambiguous, which creates litigation risk and delays when parties disagree on enforceability.
Using inconsistent party names or signing capacities, causing later identity disputes and requiring corrective amendments or ratifications.
Failing to include a clear effective date or timeline, which complicates deadline enforcement and due diligence coordination.
Overreaching confidentiality language without specifying permitted disclosures, which can hinder regulatory compliance or necessary disclosures.

Typical Timelines and Deadlines in a Business Intentions Agreement

Document common timeframes so parties share expectations for negotiation, exclusivity, due diligence, and final execution.

Effective Date:

Date when the agreement’s timelines and limited obligations commence.

Exclusivity Period:

Window during which parties will not solicit competing offers.

Due Diligence Deadline:

Date by which requested documents and inspections must be completed.

Negotiation Window:

Period allocated for drafting and agreeing on the final contract.

Final Execution Date:

Target date for signing the definitive agreement, if agreed.

Example Uses: How Organizations Apply a Business Intentions Agreement

Practical examples show common uses: capturing preliminary deal terms, protecting sensitive disclosures, and preserving negotiation timelines while parties perform due diligence.

Optica Ventures (Startup)

Optica used a Business Intentions Agreement to outline a pilot deployment and timeline.

They circulated a narrowly scoped, non-binding draft for approvals.
Brian Fitzgibbons, COO, said: "The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers." The agreement helped secure timely approvals and kept negotiations on schedule.

Martin Properties (Real Estate)

Martin Properties issued an intentions agreement to reserve negotiation priority for a property sale.

They required confidentiality and a short exclusivity window.
Tim Martin, Founder, noted: "I can process and execute all of these documents online with 100% compliance and built-in security." Using the agreement reduced in-person meetings and moved the deal forward efficiently.

Frequently Asked Questions About Business Intentions Agreements

Answers to common questions about enforceability, signatures, revisions, and recordkeeping for Business Intentions Agreements.

Need help? Contact support

Is a Business Intentions Agreement legally binding?
It depends on wording. If the document expressly limits binding effect to specific clauses, only those clauses are enforceable. Courts look to intent, clear language, and consideration to determine binding obligations; include explicit binding language for any obligations meant to be enforceable.
Can this agreement be signed electronically?
Yes. Electronic signatures satisfy the ESIGN Act (15 U.S.C. ch. 96) and UETA where applicable, provided intent, consent, attribution, and retention are met. Certain exceptions may still require wet signatures per federal or state law.
Who should sign on behalf of a company?
An officer or individual with delegated authority should sign and indicate title. Verify signatory authority via corporate resolutions or an acceptable power of attorney to avoid later ratification disputes.
Do I need a notary or witnesses?
Most Business Intentions Agreements do not require notarization, but state or document-specific rules (e.g., deeds, some POAs) may. Check state requirements and include notary or witness steps when needed for recording or enforceability.
How do I correct mistakes after signing?
Prepare a written amendment signed by all parties or a corrective addendum that references the original agreement. For material changes, obtain fresh signatures and preserve the audit trail for both documents.
How long should I retain the executed agreement?
Keep records for the agreement term plus at least three years; industry rules may require longer retention (e.g., HIPAA six years, IRS three years). Preserve audit trails, timestamps, and signer authentication logs to support any future disputes.

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