Contracts

The Business Purchase Letter of Intent

Today’s post discusses an important early step when you are purchasing a business: drafting and negotiating a business purchase letter of intent. The process of drafting and negotiating a business purchase letter of intent generally follows the initial negotiation of the major business purchase terms. Those material terms—price, payment method, closing timing, and basic conditions to the sale—are generally negotiated directly between the parties on smaller business purchase and sale transactions. On larger transactions, the parties and their brokers and investment bankers negotiate those terms.

After you agree on what each party is going to do as part of the business purchase, one party (often the buyer) will distill those main business terms into a written document that is the business purchase letter of intent....

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Contracts

Understanding Contract Terms (post 7): Choice of Law and Venue

We continue the Understanding Contract Terms series by explaining choice of law and venue clauses, also called “forum selection” clauses.  You see choice of law and venue terms in many contracts, because they can be important terms worth significant money. You will often see choice of law clauses and choice of venue clauses grouped together in a single paragraph. Here is an example of a typical choice of law and venue clause:

Section ____ Governing Law; Jurisdiction. To the maximum extent permitted by applicable law, the provisions of this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of ___________, without regard to principles of conflicts of law. Each of the parties hereto...

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