Two Approaches Sample Clauses

Two Approaches. In drafting the due diligence section, there are two approaches – easy-out and specific. The more common approach is to grant the buyer an open-ended right to walk away during the inspection period “for any or no reason” and receive a full refund of the xxxxxxx money. In some transactions, the buyer’s inspection rights are identified and buyer is only able to terminate the agreement for specific reasons, such as failure to obtain franchisee approval.

Two Approaches. Most letters of intent (“LOI”) are less than two pages and at least initially prepared by the sales-person or broker. These generally identify the basics of the transaction. There is a trend, however, especially with certain institutional buyers, to circulate lengthy term sheets that attempt to negotiate the full contract provisions. Further, more and more institutional parties are less willing to re-negotiate the terms of these non-binding agreements. These documents are intended to prevent lengthy contract negotiations but in my experience the contract provisions are not fair in the first place. A sample neutral letter of intent is attached for reference at Exhibit A.