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Business Memorandum of Intent

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BUSINESS MEMORANDUM OF INTENT

This Business Memorandum of Intent (the "Memorandum") is made and entered into as of by and between Proposer Name: and Recipient Name: (each a "Party" and collectively the "Parties").

WHEREAS

WHEREAS, Proposer intends to pursue in good faith the possible transaction described as: (the "Proposed Transaction");

WHEREAS, Recipient has provided or will provide preliminary information, proposals, or services necessary to evaluate and advance the Proposed Transaction and the Parties wish to set forth certain terms governing their negotiations and preliminary obligations.

WHEREAS, this Memorandum is intended to record the Parties' mutual intentions and to serve as the basis for drafting a definitive agreement, subject to the terms and conditions set forth below.

SCOPE OF WORK

PAYMENT TERMS

The Parties agree the consideration for services and deliverables described in the Scope of Work shall be as follows.

Late payments shall bear interest at the lesser of the contractual rate specified below or the maximum rate permitted by law. Late fee rate:

TERM AND TERMINATION

This Memorandum shall commence on the Start Date: and shall expire on the End Date: unless earlier terminated in accordance with this section.

Either Party may terminate this Memorandum for convenience upon written notice delivered to the other Party at least days prior to the intended termination date.

Either Party may terminate for material breach if the breaching Party fails to cure such breach within days after receipt of written notice specifying the breach.

CONFIDENTIALITY

The Parties acknowledge that, in connection with the Proposed Transaction, each Party may disclose certain non-public, confidential, or proprietary information ("Confidential Information"). Each Party agrees to (a) hold Confidential Information in strict confidence, (b) use Confidential Information solely for the purpose of evaluating and effecting the Proposed Transaction, and (c) not disclose Confidential Information to any third party except to those of its directors, officers, employees, advisors, or affiliates who have a need to know and who are bound by confidentiality obligations at least as protective as those herein. Confidentiality obligations shall survive termination of this Memorandum for a period of years.

BINDING EFFECT; EXPENSES

Except as expressly provided in the Confidentiality and Expenses paragraphs and any written exclusivity provision executed by the Parties, this Memorandum is intended solely as a statement of the present intentions of the Parties and, unless converted into a definitive written and executed agreement, shall not be legally binding upon the Parties. Notwithstanding the foregoing, provisions regarding confidentiality, exclusivity (if elected below), payment of fees and expenses, and governing law shall be binding.

Each Party shall bear its own costs and expenses in connection with the negotiation and preparation of definitive transaction documents, except as otherwise agreed in writing.

Parties elect to be exclusive for a period of days from the date of this Memorandum; exclusivity shall be binding if this box is checked.

GOVERNING LAW

This Memorandum shall be governed by and construed in accordance with the laws of the State of without regard to choice-of-law principles. The Parties submit to the exclusive jurisdiction of courts located in that State for resolution of disputes arising from or relating to this Memorandum.

ENTIRE AGREEMENT

This Memorandum constitutes the entire understanding between the Parties with respect to the Proposed Transaction and supersedes all prior oral or written understandings, proposals, or agreements. No amendment to this Memorandum shall be effective unless in writing and signed by authorized representatives of both Parties.

NOTICES

REPRESENTATIONS AND WARRANTIES

Each Party represents and warrants that it has the full corporate power and authority to enter into this Memorandum and that the individual signing below is authorized to bind the Party. Each Party further represents that, to its knowledge, there is no existing agreement or obligation that would prevent performance of the Parties' obligations described herein.

First Party Printed Name:

By:

Date:

Second Party Printed Name:

By:

Date:

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What a Business Memorandum of Intent Is and When It’s Used

A Business Memorandum of Intent is a preliminary written summary that outlines the major terms and mutual understanding between parties before drafting a binding agreement. It typically identifies the parties, describes the proposed transaction, states key commercial terms such as price or consideration, and records any exclusivity or confidentiality expectations. Although often non‑binding in whole, specific clauses—such as confidentiality, exclusivity, or dispute resolution—can be made binding. The memorandum helps guide due diligence, negotiation priorities, and the timing of a definitive contract.

Why Parties Use a Memorandum of Intent

A memorandum clarifies initial expectations, reduces misunderstandings, and creates a structured path toward a definitive agreement. It documents deal parameters that guide negotiations, preserves bargaining positions, and can protect sensitive information via binding confidentiality or exclusivity clauses.

Why Parties Use a Memorandum of Intent

Typical Parties and Teams That Prepare These Memoranda

Various stakeholders prepare or sign memoranda of intent when exploring transactions, partnerships, or pilot engagements.

  • Founders and small business owners negotiating acquisitions or strategic partnerships.
  • Corporate development and M&A teams outlining preliminary deal economics and timelines.
  • Real estate brokers and developers documenting key terms before purchase contracts.

The document suits any scenario where parties want a clear, written statement of intent while they finalize binding terms and complete due diligence.

Core Sections to Include in a Professional Memorandum of Intent

A concise memorandum should cover the deal summary, parties, commercial terms, timelines, conditional requirements, and signature authority to reduce ambiguity during negotiations.

Parties

Identify each legal entity and contact information, including company type and state of formation to ensure correct contracting parties are used later.

Transaction Summary

Provide a short description of the proposed transaction or business arrangement, including scope, deliverables, and whether the arrangement is asset‑ or equity‑based.

Commercial Terms

List essential economics: purchase price, payment schedule, deposit or escrow terms, and any earn‑outs or milestone payments.

Conditions and Due Diligence

Specify required approvals, material due diligence items, financing contingencies, and any regulatory or third‑party consents needed to close.

Binding Clauses

Make clear which provisions are binding (for example confidentiality or exclusivity) and which are non‑binding preliminary statements.

Signatures and Authority

Include printed names, titles, signature lines, and the effective date; state who has authority to bind each entity.

Essential Data Fields to Capture

Business Name: Legal entity name
Contact Details: Street address, phone, email
Effective Date: MM/DD/YYYY
Term Length: Start and end period
Consideration: Price or non‑monetary terms
Signature Block: Name, title, date

How to Complete a Business Memorandum of Intent, Step by Step

Follow a simple sequence to produce a clear memorandum: gather facts, draft key terms, confirm binding clauses, obtain signatures, and circulate final copies.

  • 01
    Gather Details: Collect legal names, addresses, and contact information.
  • 02
    Draft Terms: Write transaction summary, price, closing conditions, and timelines.
  • 03
    Specify Binding Parts: Mark confidentiality/exclusivity as binding if intended.
  • 04
    Sign and Distribute: Obtain authorized signatures and share executed copies with stakeholders.

Configuring an Online Workflow for Your Memorandum

Set up fields, signer order, authentication, and reminders to streamline review, signature, and archival when using an electronic platform.

Field | Online Setting Label | Configuration
Signature Field Required signature field with date stamp
Signer Order Sequential or parallel signing as required
Authentication Level Email code, SMS, or KBA per sensitivity
Reminder Schedule Auto reminders, frequency and escalation

Where to Send the Executed Memorandum and Typical Routing

After signatures, route the executed memorandum to legal, finance, counterparties, and the official records repository to preserve the deal record.

  • Internal Counsel: Upload executed copy to legal document repository
  • Counterparty: Send fully executed copy to all signing parties
  • Finance/Accounting: Provide terms for payment and escrow setup
  • Records Archive: Store final PDF in secure archives with retention tags

Digital Signing and Delivery Options

Electronic execution and distribution reduce turnaround and provide a tamper‑evident audit trail for the memorandum.

  • File Formats: PDF and DOCX supported
  • Integrations: CRM and cloud storage integrations
  • Authentication: Email, SMS, or KBA options

Choose a platform that supports accessible export formats, retention policies, and integrations with systems such as Salesforce, NetSuite, Microsoft 365, or Google Workspace to streamline review and storage.

Typical Timelines and Deadlines in Negotiation

Memoranda of intent often include target dates for responses, exclusivity periods, and milestones for completing due diligence or signing a definitive agreement.

Issue Date:

Date the memorandum becomes effective and starts timelines

Response Window:

Commonly 7–14 days for counterparty response

Due Diligence Period:

Often 30–90 days depending on transaction complexity

Exclusivity Window:

Specify duration parties must negotiate exclusively

Closing Target Date:

Planned date to execute the definitive agreement

Common Preparation Mistakes to Avoid

  • Using vague statements of intent rather than measurable criteria, which creates disagreement during definitive drafting and can prolong negotiations.
  • Failing to identify the correct legal entity names and signatory authority, leading to unsigned or unenforceable execution pages.
  • Not specifying which provisions are binding, causing parties to dispute whether confidentiality or exclusivity applied.
  • Neglecting to document conditions precedent like financing or regulatory approvals, which can make the memorandum misleading.

Risks and Potential Consequences of an Incorrect Memorandum

Unclear Intent: May be nonbinding
Reliance Damages: Possible claims from precontractual reliance
Confidentiality Breach: Unauthorized disclosures risk liability
Failed Closing: Misstated conditions can prevent completion
Tax Exposure: Incorrect terms may trigger reporting issues
Notary Problems: Improper notarization can weaken evidentiary value

Real‑World Examples of Memoranda of Intent

Two examples show how memoranda can accelerate negotiation and clarify responsibilities before formal contracts are drafted.

Small Business Example

A regional services firm summarized proposed acquisition terms to align expectations before due diligence

  • The memo listed price, closing conditions, and timeline
  • That early clarity reduced negotiation cycles and focused legal review on a shorter definitive purchase agreement.

Enterprise Example

A national healthcare provider used a memorandum to record commercial terms and data handling responsibilities

  • The document included binding confidentiality and data access conditions
  • Including those clauses upfront protected PHI expectations and streamlined vendor contracting.

eSignature Pricing and Feature Comparison for Executing Memoranda

Comparison of starting prices and core features across common eSignature vendors; signNow is listed first per platform overview requirements.

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 Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No envelope cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Frequently Asked Questions About Business Memoranda of Intent

Answers to common questions about enforceability, electronic signing, notarization, revisions, signatory authority, and record retention.


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