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A Letter of Intent for Software Development is commonly used in the Canadian business environment as a preliminary step before entering into a formal software development agreement. This document is particularly valuable when parties need to establish initial understanding and commitment while conducting due diligence or finalizing detailed terms. It typically includes key commercial terms, project scope overview, timeline expectations, and preliminary budget frameworks, while maintaining flexibility for detailed negotiations. The LOI helps parties align their expectations and provides a foundation for further discussions while protecting confidential information shared during the negotiation phase. While primarily non-binding, certain provisions like confidentiality and exclusivity can be made binding under Canadian law. This document is especially relevant in complex software development projects where detailed requirements and terms need careful consideration before finalizing a binding agreement.

1. Date and Parties: Date of the letter and full legal names and addresses of both parties

2. Introduction: Opening paragraph establishing the purpose of the letter and basic context

3. Project Overview: Brief description of the proposed software development project, including high-level scope and objectives

4. Key Commercial Terms: Outline of fundamental business terms including estimated budget range and high-level timeline

5. Due Diligence: Framework for information sharing and evaluation process

6. Confidentiality: Basic confidentiality obligations regarding shared information

7. Non-Binding Nature: Clear statement that the LOI is non-binding except for specified provisions

8. Timeline: Expected timeline for negotiation and execution of definitive agreements

9. Closing: Signature blocks and acknowledgment provisions