Document background
The LOI Purchase Agreement is a crucial preliminary document used in Philippine business transactions when parties are contemplating a significant purchase of assets or business interests. It serves as a stepping stone between initial discussions and the final purchase agreement, documenting the parties' serious intention to proceed with the transaction while allowing flexibility for further negotiation. Typically used in corporate acquisitions, major asset purchases, or business combinations, the LOI Purchase Agreement sets out key commercial terms, due diligence requirements, and any binding obligations such as confidentiality and exclusivity. While governed by Philippine law, particularly the Civil Code and relevant commercial regulations, the document often incorporates international business practices to facilitate cross-border transactions. It provides a structured framework for negotiations while protecting both parties' interests during the pre-contractual phase.
