Letter of Intent for Asset Acquisition — What to Include
Before a deal closes, there's usually a Letter of Intent. It's not the final contract — but it's far more than a formality. A well-drafted Letter of Intent for an asset acquisition sets the terms of the deal, establishes exclusivity, and creates the framework that the definitive purchase agreement will follow. Getting it right early shapes everything that comes after.
What Is a Letter of Intent for Asset Acquisition?
A Letter of Intent (LOI) is a preliminary document that outlines the key terms of a proposed asset acquisition before the parties negotiate a definitive agreement. In an asset acquisition, the buyer is purchasing specific assets of a business — rather than the entire company — which may include equipment, contracts, intellectual property, customer lists, or other property.
The LOI is typically non-binding on the core deal terms but binding on specific provisions like exclusivity and confidentiality.
When Do You Need One?
You need an LOI for an asset acquisition when:
- You are buying or selling specific business assets rather than an entire company
- You want to establish deal terms and exclusivity before investing in full due diligence
- You need a written framework to guide the negotiation of a definitive purchase agreement
- Multiple potential buyers are involved and you want to secure a preferred position
The LOI is the handshake that formalizes intent and protects both parties while the detailed work gets done.
What Should a Letter of Intent for Asset Acquisition Include?
1. Description of the Assets
Identify the specific assets being acquired with as much precision as possible — equipment, IP, contracts, inventory, goodwill, customer lists, and any excluded assets.
2. Purchase Price and Structure
State the proposed purchase price and how it will be paid — cash at closing, installments, earnout tied to future performance, or assumption of liabilities. Address any purchase price adjustments.
3. Assumed and Excluded Liabilities
In an asset deal, the buyer typically does not assume all liabilities of the seller — but specifying which liabilities transfer is critical. Ambiguity here is a major source of post-closing disputes.
4. Conditions to Closing
Identify the conditions that must be satisfied before the deal closes — regulatory approvals, financing, due diligence completion, third-party consents.
5. Exclusivity
A binding provision that prevents the seller from negotiating with other potential buyers for a defined period. This is one of the most important protections for a buyer.
6. Confidentiality
Both parties will share sensitive information during due diligence. The confidentiality provision — typically binding — restricts how that information can be used.
7. Due Diligence
Describe the scope and timeline of the buyer's due diligence process and the seller's obligation to provide access to information and records.
8. Timeline to Closing
Set a target timeline for completing due diligence, negotiating the definitive agreement, and closing the transaction.
9. Binding vs. Non-Binding Provisions
Clearly identify which provisions are binding (typically exclusivity, confidentiality, and governing law) and which are non-binding (typically deal terms, which remain subject to final agreement).
10. Governing Law
Specify which state's law governs the LOI.
Common Mistakes Founders Make
Treating the LOI as purely non-binding. Exclusivity and confidentiality provisions are binding. Courts have also found that sufficiently specific LOI terms can create enforceable obligations even when the document says it's non-binding.
Not defining excluded liabilities clearly. Assuming a business's liabilities without realizing it is one of the most costly mistakes in an asset acquisition. Be explicit about what you are and are not taking on.
Skipping the exclusivity provision. Without exclusivity, the seller can continue shopping the deal while you're spending time and money on due diligence.
Setting unrealistic timelines. Due diligence and definitive agreement negotiation take time. Building in appropriate milestones reduces the risk of a deal falling apart under time pressure.
Why This Matters for Founders
Whether you're acquiring assets to grow your business or selling assets to a buyer, the LOI is where the deal really starts. A well-crafted LOI aligns both parties on the key terms, protects your position during due diligence, and reduces the risk of surprises when the definitive agreement is drafted. Time spent on the LOI is time saved — and risk avoided — downstream.
Get a Lawyer-Drafted Document Without the Lawyer Bill
Letters of Intent drafted by attorneys for asset acquisitions typically cost $1,500–$3,500 depending on deal complexity. TalkingTree gives you the same quality without the invoice.
TalkingTree's Letter of Intent for Asset Acquisition template was built by experienced business attorneys and is available through the Contract Studio. Customize it to your deal, fill it out, and send it for signature — all in one platform.
- Business membership ($59.99/mo): Full access to the Contract Studio and a library of 100+ attorney-drafted templates, plus limited e-signature included. One contract alone covers the cost of your first month.
- Enterprise membership ($149.99/mo): Everything in Business, plus unlimited e-signature — built for founders and teams managing a high volume of contracts.
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This page is for informational purposes only and does not constitute legal advice. For advice specific to your situation, consult a licensed attorney.