LETTER of INTENT / TERM SHEET
Contact Neufeld Legal for commercial leasing legal matters at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com
A Letter of Intent (LOI) or Term Sheet is typically a non-binding document that sets forth the principal economic and legal parameters agreed upon for the commercial lease transaction between the Landlord (the Lessee) and the Tenant (the Lessee), and the location of the intended commercial space (the Premises). The primary objective of this Term Sheet is to establish a clear and mutual understanding of the fundamental deal points, thereby facilitating the efficient and accurate drafting of the comprehensive, definitive, and legally enforceable Lease Agreement.
Except for the specific provisions related to exclusivity, confidentiality, and the allocation of transaction expenses (which are immediately binding upon execution), this Term Sheet is purely an expression of mutual intent and does not constitute a legal obligation for either party to execute a lease or consummate the transaction. Both the Landlord and the Tenant acknowledge that this proposal is conditional upon the satisfactory completion of all customary due diligence investigations, the securing of necessary corporate or board approvals, and the ultimate mutual agreement on, and execution of, the final Lease Agreement and all its exhibits. The parties commit to proceeding diligently and in good faith to complete due diligence and finalize the necessary legal documentation within a specified time frame.
The subsequent sections of this document detail the essential provisions of the proposed tenancy, including the base rental rate, the length of the lease term, permitted use of the Premises, delineation of operating expense responsibility, and the handling of key rights such as assignment and subletting [more on assigning and subleasing]. By signing this document, the parties indicate their provisional approval of these material terms and confirm their shared intent to advance from this preliminary framework to formal legal drafting. Should the parties fail to reach mutual agreement on the full terms and conditions of the Lease Agreement, including any conditions precedent not explicitly covered herein, either party reserves the right to terminate further negotiations without liability, subject only to the limited binding clauses established in the Letter of Intent / Term Sheet.
For knowledgeable and experienced legal representation in negotiating, reviewing and drafting lease agreements, and protecting your business’ legal rights thereunder, contact lease lawyer Christopher Neufeld at 403-400-4092 [Alberta], 905-616-8864 [Ontario] or Chris@NeufeldLegal.com.
