Generic LOI template vs. Attorney-prepared LOI

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June 28, 2023

by a searcher from University of Maryland at College Park in New York, NY, USA

Do most buyers use a generic LOI template to save costs, or is it prudent to hire an attorney to draft something?

For the former, does anyone have a fairly standard LOI that I can use to fill in the blanks regarding purchase price, deal structure, etc.?

Also, is it customary for the due diligence period to start the day the LOI is executed or once all of the due diligence items have been delivered to the buyer?

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Reply by a searcher
from Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM) in Brownsville, TX, USA
Apart from cost, I there's probably not much benefit in using a generic LOI, the best is to sit down a couple of times with an attorney that can draft up and review a good LOI for you, best to have it tailored to your specific needs!
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Reply by a searcher
from University of California, Los Angeles in London, UK
A generic template is typically fine assuming you have a professional one. Also if you have legal counsel already in place, they can usually give you a template as well.

I've also found that I've tended to simplify them over the years as well. At the end of the day, it's mostly a non-binding document. The only binding terms are the exclusivity and some administrative clauses (e.g. choice of law, etc.), so I would say think about how the rest of the document communicates with your seller (and their representatives). If it's overly complex or has language which appears harsh or one sided, you may lose them to another potentially more friendly offer.
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