Document background
The Exclusive Letter of Intent is a crucial document in Philippine business transactions, particularly in mergers, acquisitions, and significant commercial deals. It serves as a preliminary agreement that outlines the proposed transaction terms while establishing an exclusive negotiation period. This document is commonly used when parties have progressed beyond initial discussions but require protection and structure for their negotiations before proceeding to definitive agreements. Under Philippine law, while most provisions of an LOI are typically non-binding, the exclusivity and confidentiality provisions are usually drafted as legally binding commitments. The document should comply with the Civil Code of the Philippines and relevant commercial regulations, particularly regarding contract formation and enforceability. It's especially important in complex transactions where detailed due diligence and negotiation periods are necessary, providing a framework for the parties to proceed with their discussions while maintaining confidentiality and exclusivity.
