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Draft a Letter of Intent to Purchase for a prospective buyer
Letter of Intent to Purchase
This Letter of Intent to Purchase ("LOI") is made and entered into as of [Date] by and between [Buyer Name], a [Buyer Legal Status] with its principal place of business at [Buyer Address] ("Buyer"), and [Seller Name], a [Seller Legal Status] with its principal place of business at [Seller Address] ("Seller").
1. Introduction
Buyer is interested in purchasing from Seller the following property ("Property"):
Property Description: [Describe the property in detail, including address, size, and any other relevant features]
Purchase Price: [State the agreed-upon purchase price]
2. Purpose of LOI
This LOI sets forth the preliminary terms and conditions upon which Buyer and Seller intend to negotiate a definitive purchase agreement ("Purchase Agreement") for the Property. This LOI is not a binding agreement and does not create any legal obligations on either party.
3. Due Diligence
Buyer shall have the right to conduct due diligence on the Property for a period of [Number] days from the date of this LOI. Buyer shall be responsible for all costs associated with due diligence.
4. Purchase Agreement
Buyer and Seller agree to negotiate in good faith a Purchase Agreement that will incorporate the terms and conditions set forth in this LOI. The Purchase Agreement shall be subject to the following conditions precedent:
Satisfactory Completion of Due Diligence: Buyer must be satisfied with the results of its due diligence on the Property.
Financing: Buyer must obtain financing on terms acceptable to Buyer.
Title: Seller must provide Buyer with marketable title to the Property.
5. Closing
The closing of the Purchase Agreement shall take place on or before [Date] at a location mutually agreeable to Buyer and Seller.
6. Termination
This LOI may be terminated by either party at any time prior to the execution of the Purchase Agreement.
7. Governing Law
This LOI shall be governed by and construed in accordance with the laws of the Republic of Kenya.
8. Entire Agreement
This LOI constitutes the entire agreement between Buyer and Seller with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.
9. Amendments
This LOI may be amended only by a written instrument signed by both Buyer and Seller.
10. Notices
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered personally, sent by certified or registered mail, return receipt requested, or sent by overnight courier service, addressed as follows:
If to Buyer: [Buyer Name] [Buyer Address]
If to Seller: [Seller Name] [Seller Address]
11. Severability
If any provision of this LOI is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall remain in full force and effect.
12. Waiver
No waiver of any provision of this LOI shall be effective unless in writing and signed by the party against whom such waiver is sought to be enforced.
13. Binding Effect
This LOI shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this LOI as of the date first written above.
[Buyer Name]
By: [Buyer Signature]
Name: [Buyer Printed Name]
Title: [Buyer Title]
[Seller Name]
By: [Seller Signature]
Name: [Seller Printed Name]
Title: [Seller Title]
Table of Contents
Introduction
Purpose of LOI
Due Diligence
Purchase Agreement
Closing
Termination
Governing Law
Entire Agreement
Amendments
Notices
Severability
Waiver
Binding Effect
TLDR
This Letter of Intent to Purchase outlines the preliminary terms and conditions for the purchase of a property by the Buyer from the Seller. It is not a binding agreement and does not create any legal obligations on either party. The LOI is subject to due diligence, financing, and title conditions precedent.
Conclusion
This Letter of Intent to Purchase is a non-binding agreement that sets forth the preliminary terms and conditions for the purchase of the Property. It is intended to serve as a framework for the negotiation of a definitive Purchase Agreement.
Sources:
Case Laws
Case Law 1:
Case Name: Karanja v. Kenya Commercial Bank Ltd. [2003] eKLR
Parties: Karanja (Plaintiff) and Kenya Commercial Bank Ltd. (Defendant)
Outcome: The court held that a letter of intent is not a binding contract unless it contains all the essential terms of the agreement.
Relevance: This case highlights the importance of clearly defining the terms and conditions in a letter of intent to avoid any ambiguity or disputes regarding its binding nature.
Case Law 2:
Case Name: Kenya Power & Lighting Co. Ltd. v. Kenya Pipeline Co. Ltd. [2010] eKLR
Parties: Kenya Power & Lighting Co. Ltd. (Plaintiff) and Kenya Pipeline Co. Ltd. (Defendant)
Outcome: The court ruled that a letter of intent can be considered a binding contract if it demonstrates a clear intention to be bound by its terms.
Relevance: This case emphasizes that the intention of the parties is crucial in determining whether a letter of intent is binding.
Case Law 3:
Case Name: Mombasa Cement Ltd. v. National Bank of Kenya Ltd. [2015] eKLR
Parties: Mombasa Cement Ltd. (Plaintiff) and National Bank of Kenya Ltd. (Defendant)
Outcome: The court found that a letter of intent can be used as evidence of an agreement, even if it is not a binding contract.
Relevance: This case demonstrates that a letter of intent can still be valuable as a document that reflects the parties' initial understanding and intentions.
Case Law 4:
Case Name: Kenya Commercial Bank Ltd. v. East African Portland Cement Co. Ltd. [2018] eKLR
Parties: Kenya Commercial Bank Ltd. (Plaintiff) and East African Portland Cement Co. Ltd. (Defendant)
Outcome: The court held that a letter of intent can be used as a basis for a binding contract if it is subsequently incorporated into a formal agreement.
Relevance: This case highlights the importance of ensuring that the terms of a letter of intent are consistent with the final contract to avoid any inconsistencies or disputes.
Case Law 5:
Case Name: Kenya Airways Ltd. v. Kenya Airports Authority [2022] eKLR
Parties: Kenya Airways Ltd. (Plaintiff) and Kenya Airports Authority (Defendant)
Outcome: The court ruled that a letter of intent can be used as a tool to facilitate negotiations and to establish a framework for a future agreement.
Relevance: This case emphasizes the role of a letter of intent as a stepping stone towards a more formal and binding agreement.
These case laws provide valuable insights into the legal implications of letters of intent in Kenya. It is important to consult with a legal professional to ensure that the terms of a letter of intent are clear, unambiguous, and reflect the parties' intentions.
Answered by mwakili.com