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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Commercial Law

Date & Time
  • event Date

    Wednesday, April 19, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE webinar will provide counsel with guidance on structuring letters of intent (LOIs), memoranda of understanding (MOUs), term sheets, and other preliminary legal documentation intended as only partially binding or even nonbinding in commercial transactions. The panel will review how courts have ruled on the interpretation and enforcement of these preliminary agreements, explain the potential risks associated with their use, and provide best practices for minimizing risks with careful drafting and wise communications.

Faculty

May Lu
Shareholder
Tiffany & Bosco

Ms. Lu serves the transactional needs of businesses and their owners by assisting them with business formation, joint ventures, mergers and acquisitions, and other business agreements. She also provides guidance to businesses concerning disputes among owners and related fiduciary duties. In addition, she assists clients with regulatory and governance issues related to the U.S. Small Business Administration and other federal, state, and local programs.

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Morris A. Nunes
Of Counsel
Parent: King, Yaklin & Wilkins, LLP

Mr. Nunes specializes in business counseling and transactional work. His practice focuses on representing and counseling privately held businesses, their owners and the owners’ families, as well as non-profits and trade associations. He is a frequent CLE presenter on business law topics and authored five books, including Basic Legal Forms for Business, The Right Price for Your Business and Balance Sheet Management, as well as many articles in professional and financial publications. Mr. Nunes currently serves Of Counsel to King Yaklin & Wilkins in Georgia.

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Description

Parties use preliminary agreements (LOIs, MOUs, or term sheets) (1) when parties contemplating a transaction want to institute a confidential relationship before the deal, (2) when parties to a potential transaction want to establish baseline business terms, or (3) when the timeline for an intended arrangement is such that contingencies for termination are uncertain.

LOIs, MOUs, and term sheets are commercially favored but can introduce significant risk if not drafted precisely. Risks include creating an obligation to perform a contract, the inability to enforce limited terms expected to be enforceable, and formal disputes or litigation.

Typically, parties mean LOIs, MOUs, and term sheets to evidence their intent to do something in the future. While intended to show good faith rather than "final" contract documents, ambiguity and differing intentions can result in a dispute. Whether preliminary agreements are binding or non-binding contracts depends on the provisions in the specific contract. Courts look at multiple factors in finding whether the language in an initial agreement is binding or non-binding.

Listen as our experienced panel of practitioners examines legal risks and best practices for structuring LOIs, MOUs, or term sheets to minimize disputes over whether the agreements are binding.

Outline

  1. Legal and commercial risks of LOIs, MOUs, and term sheets
  2. Negotiating tactics and considerations
  3. Drafting methods and key provisions to minimize risks and clearly evidence intent

Benefits

The panel will review these and other high priority issues:

  • What types of risks are created by the use of such instruments?
  • What logic are courts using in ruling on these preliminary agreements?
  • How can counsel help clients minimize risk through effective drafting and precise communication?