Letters of intent are usually legally binding on the potential buyer but rarely on the target firm.

Question

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Letters of intent are usually not legally binding on either the potential buyer or the target firm. They are typically seen as a preliminary agreement that outlines the key terms and conditions of a potential transaction, with the understanding that a more formal agreement will be negotiated and executed at a later date. However, certain provisions within a letter of intent, such as confidentiality or exclusivity clauses, may be legally binding.

Letters of Intent Are Usually Legally Binding on the Potential