Free Letter of Intent Template
A letter of intent (LOI) sets out the preliminary terms and intentions of parties before entering into a formal agreement. Use our free UK template to outline proposed transactions, acquisitions, partnerships or property deals with clarity and confidence.
Companies House No. OC423456
+44 20 7946 0500
deals@apexcapital.co.uk
Companies House No. 11223344
This Letter of Intent (the "LOI") sets out the proposed principal terms on which Apex Capital Partners LLP wishes to progress the transaction described below with Bright Spark Technologies Ltd. Except for Clauses 5 and 6, this LOI is not legally binding and is made expressly "subject to contract" (Rose and Frank Co v JR Crompton and Bros [1925] AC 445; Confetti Records v Warner Music UK [2003] EWHC 1274 (Ch)). Nothing in this LOI creates any obligation to complete the transaction.
Description: Proposed acquisition of 100% of the issued share capital of Bright Spark Technologies Ltd, a developer of AI-driven quality control software for the manufacturing sector.
Basis: £4,000,000 cash at completion plus £500,000 deferred consideration payable 12 months post-completion, subject to achievement of the FY2026 EBITDA target of £750,000.
All figures are indicative only, exclusive of VAT where chargeable, and subject to adjustment on the basis of agreed completion accounts, working capital mechanisms, and due diligence findings.
Target Completion: 30 June 2026
LOI Expiry: This LOI shall automatically expire on 9 May 2026 unless extended by the parties in writing.
The parties intend to work together in good faith and with reasonable expedition towards executing definitive legally binding documentation (Yam Seng Pte Ltd v International Trade Corp [2013] EWHC 111 (QB)), while acknowledging that under English law a bare duty to negotiate in good faith is unenforceable (Walford v Miles [1992] 2 AC 128).
(a) this LOI does not constitute an offer capable of acceptance, nor does it create any contract for the proposed transaction;
(b) no obligation to negotiate, to reach agreement, or to complete any transaction is created;
(c) either party may withdraw from negotiations at any time without liability (save in respect of the Binding Provisions);
(d) a binding contract shall arise only upon execution by both parties of definitive documentation;
(e) this LOI is made expressly "subject to contract" and the principle in RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH [2010] UKSC 14 is acknowledged such that commencement of work or part-performance shall not give rise to an implied contract on the terms of this LOI.
5.1 Confidentiality. Binding (Clause 5.1). Both parties shall keep the existence and terms of this Letter of Intent and all information disclosed in connection with the proposed transaction strictly confidential. The confidentiality obligation shall survive the expiry or withdrawal of this Letter of Intent for a period of two (2) years. This clause is grounded in the common-law duty of confidence (Coco v A. N. Clark (Engineers) Ltd [1968] FSR 415) and the Trade Secrets (Enforcement, etc.) Regulations 2018.
5.2 Exclusivity. Binding (Clause 5.2). From the date of this Letter of Intent and for a period of 60 days (the "Exclusivity Period"), Apex Capital Partners LLP shall not, and shall procure that none of its directors, officers, employees, agents or advisers shall, directly or indirectly: (a) solicit, initiate, encourage or entertain any offer, proposal or enquiry from any third party in connection with the proposed transaction or any alternative transaction; (b) engage in discussions or negotiations with any such third party; or (c) enter into any agreement (whether binding or non-binding) with any such third party. This lock-out obligation is made in accordance with Pitt v PHH Asset Management Ltd [1994] 1 WLR 327. Breach shall entitle Bright Spark Technologies Ltd to equitable relief (including injunction) in addition to damages.
5.3 Costs. Binding (Clause 5.3). Each party shall bear its own costs of and incidental to the negotiation, preparation and execution of this Letter of Intent and the proposed transaction (whether or not completed).
5.5 Data Protection. Each party shall comply with the UK General Data Protection Regulation and the Data Protection Act 2018 in respect of personal data shared during due diligence. Data shall be used solely for evaluating the proposed transaction and shall be returned or destroyed on written request (save for copies required by law or retained by professional advisers).
5.6 Non-Reliance. Each party acknowledges that it has not relied on any representation, warranty or assurance made in connection with this LOI save as expressly set out herein. Nothing in this clause shall exclude liability for fraud or fraudulent misrepresentation.
Third-Party Rights. A person who is not a party to this LOI shall have no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.
Additional Notes. Management access, financial information and customer references will be provided within 10 Business Days of countersignature. The Proposing Party will use reasonable endeavours to complete confirmatory due diligence within 45 Business Days.
What Is a Letter of Intent?
A letter of intent is a written document that outlines the preliminary understanding between two or more parties who intend to enter into a formal agreement. It sets out the key commercial terms, timelines and conditions that will form the basis of future negotiations.
In England and Wales, a letter of intent is generally not legally binding unless it expressly states otherwise or contains language that creates enforceable obligations. Courts will look at the specific wording and the parties’ conduct to determine whether binding commitments have been made.
UK letters of intent are widely used in British mergers and acquisitions, property transactions, joint ventures and commercial partnerships. They help ensure both parties are aligned on fundamental terms before investing time and resources into drafting comprehensive legal documentation under English law.
What's Covered in This Template
Our letter of intent template covers all essential elements for a clear and professional preliminary agreement.
Party Details
Full legal names, registered addresses and company registration numbers of all parties involved.
Transaction Overview
A clear description of the proposed transaction, deal or arrangement being contemplated.
Key Commercial Terms
Proposed price, consideration, payment terms and other core financial elements of the deal.
Due Diligence Period
Agreed timelines and scope for due diligence investigations before proceeding to a formal agreement.
Conditions Precedent
Key conditions that must be satisfied before the parties will enter into a binding agreement.
Exclusivity Clause
Whether the parties agree to negotiate exclusively with each other during a specified period.
Confidentiality Provisions
Obligations to keep the proposed transaction and exchanged information confidential.
Binding and Non-Binding Clauses
Clear identification of which provisions are legally binding and which are merely indicative.
Timeline and Milestones
Target dates for key stages including signing, completion and any longstop date.
Termination Rights
Circumstances under which either party may withdraw from negotiations without liability.
How to Create a Letter of Intent
Follow these steps to produce a professional letter of intent using our template.
- 1
Identify the Parties
Enter the full legal names and details of all parties involved in the proposed transaction.
- 2
Describe the Proposed Deal
Outline the nature and scope of the transaction, including the subject matter and key objectives.
- 3
Set Out Key Terms
Specify the proposed commercial terms such as price, payment structure and any conditions precedent.
- 4
Define Binding Provisions
Clearly state which clauses are intended to be legally binding (such as confidentiality and exclusivity) and which are non-binding.
- 5
Review and Send
Review the completed letter for accuracy, download as PDF and share it with the other party for signature.
Legal Considerations
Understanding the legal implications of a letter of intent is essential before signing.
This template is for informational purposes only and does not constitute legal advice. Consult a qualified solicitor for advice specific to your situation.
Reviewed for England & Wales law
Binding vs Non-Binding
Under English law, a UK letter of intent may create binding obligations if the language used is sufficiently certain and the British parties intend to be bound. The case of RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH [2010] UKSC 14 confirmed that UK courts will examine the objective intention of the parties. Always clearly label which provisions are binding in England and Wales.
Subject to Contract
Including the phrase "subject to contract" is standard practice in England and Wales to indicate that no binding UK agreement exists until a formal contract is executed. However, this is not an absolute safeguard and British parties should take care with their wording and conduct under English law.
Confidentiality and Exclusivity
Confidentiality and exclusivity clauses within a UK letter of intent are typically intended to be binding. Breach of these provisions may give rise to a claim for damages in England and Wales. Ensure such clauses are drafted with precision under English law and include clear time limits.
Good Faith Obligations
English law does not impose a general duty of good faith in British commercial negotiations, unlike some civil law jurisdictions. However, specific good faith obligations can be expressly agreed in the UK letter of intent and will be enforceable if sufficiently clear under English law.
Frequently Asked Questions
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