Watch out for these two common mistakes that lawyers often find in a letter of intent (LOI):
1. Creating a legally binding contract, when all you wanted was a short, informal “roadmap” to your deal before negotiating the contract.
This mistake is easy to make — even if you are only sending emails back and forth — and often expensive to fix. It’s also easy to avoid by adding a simple clause to your document
2. Not getting the best deal because you consulted a lawyer too late, after finishing your letter of intent (LOI).
Frequently, a short review by a lawyer can reveal important business and legal points that need to be settled up front in the LOI, before investing money in drafting and negotiating a full-length contract. And, legal fees for drafting and negotiating a contract can be much lower when you resolve the major issues first in an LOI.
Attorney Harry Boadwee is a technology contracts lawyer in Silicon Valley, California, with over 20 years of experience. He represents both large corporations and small startups, and over the years has negotiated with many of the largest U.S. and international technology companies. He has years of experience creating, drafting and negotiating letters of intent, memorandums of understanding (MOU’s) and term sheets for many different types of business deals.
Our newsletter, Harry Boadwee’s Technology Law Letter, covers hot topics, questions and issues with technology contracts and negotiations. A recent issue answered the common question, “Should You Sign Your Term Sheet?” For the answer, get a free subscription and look at issue #5 in the newsletter archive.