What does a confidentiality clause do in a UK letter of intent?

A confidentiality clause requires the parties to keep shared business, financial or legal information private during negotiations.

What is an exclusivity clause in a letter of intent?

An exclusivity clause prevents one or both parties from negotiating with others for a set period while discussions continue.

Why include a costs clause in a letter of intent?

A costs clause explains whether each party pays its own costs or whether one party will reimburse specific expenses.

What governing law should a UK letter of intent use?

A governing law clause identifies the law that applies to the letter of intent, such as the laws of England and Wales, Scotland or Northern Ireland.

Can letter of intent clauses be customised?

Yes, the clause wording should match the transaction type, the parties’ intentions and the relevant UK jurisdiction.

How does this clause library help create a letter of intent?

They help users understand common drafting options before generating a tailored letter of intent on the main document page.

Is this Letter of Intent Clause Library legal advice?

No. It is an information resource and should not replace legal advice for complex, high-value or unusual transactions.

EN-GB>Corporate>Letter of Intent>United Kingdom Letter of Intent Clause Library

United Kingdom Letter Of Intent Clause Library

Created: 9 Jun 2026

Explore practical clause examples for letters of intent in the United Kingdom. This dataset helps you compare wording, structure key terms, and draft with more confidence alongside our AI Generated Letter of Claim for use in the United Kingdom resources.

Clause Name	Clause Purpose	Typical Binding Treatment	Drafting Risk	Drafting Notes
Commercial term
Transaction Description	Identifies the proposed deal or project covered by the letter.	Usually non-binding	Medium	Keep factual and avoid language suggesting a concluded agreement.
Indicative Price	States a proposed or indicative price for the transaction.	Usually non-binding	High	Say it is indicative, subject to diligence, contract, and approvals.
Valuation Basis	Explains assumptions behind the proposed valuation.	Usually non-binding	Medium	List assumptions such as cash-free debt-free, working capital, and accounts date.
Payment Terms	Outlines proposed timing and method of payment.	Usually non-binding	Medium	Clarify whether completion payments, deferred payments, or instalments are illustrative only.
Deposit	Records any proposed upfront payment or holding deposit.	May be binding	High	State if paid, refundable, forfeitable, held on trust, or credited at completion.
Deferred Consideration	Sets out proposed post-completion payment mechanics.	Usually non-binding	High	Keep high-level unless formula, dates, and contingencies are fully intended.
Earn-Out	Describes proposed performance-linked future consideration.	Usually non-binding	High	Flag accounting basis, targets, control, information rights, and dispute process.
Assets Included	Lists the assets proposed to be included in the transaction.	Usually non-binding	Medium	Avoid exhaustive transfer language unless the clause is intended to bind.
Excluded Assets	Identifies assets not expected to transfer.	Usually non-binding	Medium	Use indicative wording and reconcile with diligence findings.
Assumed Liabilities	Outlines liabilities proposed to be assumed or excluded.	Usually non-binding	High	State assumptions clearly avoid binding debt assumption language.
Shares To Be Acquired	Specifies proposed share class and percentage to be acquired.	Usually non-binding	Medium	Check issued share capital, options, pre-emption rights, and consents.
Property Terms	Summarises proposed lease, sale, or occupation terms.	Depends on wording	High	For land sales, remember written signed contract requirements under section 2 LPMPA 1989.
Contracting Out Of Security Of Tenure	Flags any intention to exclude business tenancy renewal rights.	Depends on wording	High	Formal warning and declaration procedure is needed before lease completion.
Employee Transfer Assumptions	Records assumptions about employees moving with a business transfer.	Usually non-binding	High	Address TUPE assumptions, consultation, employee liability information, and indemnities later.
Intellectual Property Treatment	States proposed ownership, licensing, or assignment approach for IP.	Usually non-binding	High	Identify registered rights, background IP, foreground IP, and licence scope.
Technology Access	Outlines proposed access to software, systems, or platforms.	May be binding	Medium	If access begins before contract, include security, licence, and revocation terms.
Scope Of Services	Summarises proposed services, deliverables, or collaboration scope.	Usually non-binding	Medium	Avoid detailed commitment wording unless interim services are intended.
Proposed Contract Term	States expected duration of the final agreement.	Usually non-binding	Low	Distinguish final contract term from LOI expiry or exclusivity period.
Process term
Conditions Precedent	Lists events that must occur before the main deal proceeds.	Depends on wording	High	State whether conditions are process milestones only or binding obligations.
Due Diligence Access	Allows access to information for investigation before contract.	Often binding	Medium	Tie access to confidentiality, data protection, privilege, and reasonable notice.
Data Room Rules	Controls use, copying, and access to data room material.	Often binding	Medium	Specify authorised users, download limits, audit trail, and withdrawal rights.
Indicative Timetable	Sets expected milestones for diligence, negotiation, and completion.	Usually non-binding	Low	Use target dates and avoid absolute obligations unless intended.
Definitive Agreements	Confirms final obligations will be in later signed documents.	Often binding	High	Use clear subject to contract wording to avoid unintended contractual effect.
Subject To Contract	States that main deal terms are not binding until formal contract.	Often binding	High	Repeat consistently and carve out clauses intended to bind immediately.
No Obligation To Proceed	Preserves freedom not to complete the proposed transaction.	Often binding	High	State neither party must proceed unless and until definitive documents are signed.
Binding Clauses List	Identifies which provisions are legally binding.	Often binding	High	List binding clauses expressly and say all others are non-binding.
Internal Approvals	Makes the proposal subject to board, investor, or management approval.	Depends on wording	Medium	Specify whose approval is needed and whether seeking it is obligatory.
Regulatory Approvals	Flags approvals or clearances required from regulators.	Depends on wording	High	Consider CMA merger control, sector consents, subsidies, sanctions, and investment screening.
National Security And Investment Clearance	Addresses possible UK investment screening approval requirements.	Depends on wording	High	Mandatory notification may apply in sensitive sectors before completion.
Competition Law Compliance	Prevents exchange or coordination that could breach competition law.	Often binding	High	Limit competitively sensitive information sharing and avoid gun-jumping.
Sanctions Compliance	Requires parties to comply with UK sanctions restrictions.	Often binding	High	Include screening, no prohibited dealings, and right to terminate for sanctions risk.
Anti-Bribery And Corruption	Requires lawful conduct during negotiations and transaction planning.	Often binding	Medium	Cover improper payments, facilitation payments, gifts, and third-party advisers.
Confidentiality
Confidentiality Obligation	Protects confidential information exchanged during negotiations.	Often binding	High	Define protected information, purpose, exceptions, duration, and permitted recipients.
Existing NDA Priority	Coordinates the LOI with any earlier non-disclosure agreement.	Often binding	Medium	State whether the NDA survives, prevails, or is supplemented by the LOI.
Permitted Disclosure	Allows disclosure to advisers, funders, group companies, or regulators.	Often binding	Medium	Require recipients to know and follow confidentiality restrictions.
Compelled Disclosure	Allows disclosure required by law, court, regulator, or exchange.	Often binding	Medium	Require prior notice where lawful and limit disclosure to required extent.
Return Or Destruction Of Information	Requires confidential materials to be returned or destroyed on request.	Often binding	Medium	Allow archival, legal, regulatory, and automatic backup exceptions.
Personal Data Handling	Controls use of personal data shared during negotiations.	Often binding	High	Address UK GDPR roles, lawful basis, security, minimisation, and transfers.
Public Announcements	Restricts public statements about the proposed transaction.	Often binding	Medium	Require consent, with exceptions for legal or market disclosure duties.
Restricted Use Of Information	Limits information use to evaluating the proposed transaction.	Often binding	Medium	Define the permitted purpose narrowly and include affiliates and advisers.
Non-Solicitation Of Staff	Restricts poaching employees during or after negotiations.	May be binding	High	Limit duration, roles covered, and exclude general recruitment adverts.
Non-Solicitation Of Customers	Restricts targeting customers learned about through negotiations.	May be binding	High	Use only where justified narrow scope, customers, period, and territory.
No Contact With Target Stakeholders	Prevents unauthorised contact with employees, customers, suppliers, or landlords.	Often binding	Medium	Permit approved contacts and ordinary-course existing relationships.
Exclusivity
Exclusivity Period	Prevents a party from negotiating with others for a set period.	Often binding	High	Define duration, restricted transactions, affected parties, and permitted exceptions.
Lock-Out Undertaking	Stops a seller from dealing with third-party bidders temporarily.	May be binding	High	Use a certain fixed period agreements to negotiate in good faith are risky.
No-Shop Restriction	Prevents actively seeking competing offers.	Often binding	High	Define solicitation, indirect approaches, advisers, and unsolicited inbound interest.
No-Talk Restriction	Restricts discussions with competing bidders or counterparties.	Often binding	High	Consider fiduciary duties, listed company rules, and board discretion.
Standstill	Restricts acquiring securities or taking control-related steps.	Often binding	High	Use for public or widely held companies align with takeover and market rules.
Costs and expenses
Break Fee	Requires payment if the proposed transaction does not proceed in defined cases.	May be binding	High	Define triggers, amount, genuine rationale, and any regulatory limits.
Each Party Bears Own Costs	States each party pays its own negotiation and adviser costs.	Often binding	Medium	Say it survives termination and covers legal, tax, finance, and diligence costs.
Expense Reimbursement	Requires one party to reimburse specified transaction costs.	May be binding	High	Cap amounts, define eligible costs, evidence, VAT treatment, and payment date.
VAT Treatment	Records whether stated amounts include or exclude VAT.	May be binding	Medium	State VAT exclusivity, invoicing, and tax assumptions for fees and deposits.
Stamp Taxes Responsibility	Allocates responsibility for stamp duty, SDLT, or related taxes.	May be binding	Medium	Specify buyer payment responsibility and note tax advice is deal-specific.
Governing law
Governing Law	Selects the law governing the LOI.	Often binding	Medium	Use England and Wales, Scotland, or Northern Ireland deliberately.
Jurisdiction	Identifies the courts for disputes about the LOI.	Often binding	Medium	Choose exclusive or non-exclusive jurisdiction and align with governing law.
Dispute Resolution Process	Sets escalation, mediation, arbitration, or court steps for LOI disputes.	Often binding	Medium	Keep proportionate detailed arbitration clauses need seat, rules, and language.
Service Of Notices And Process	Specifies how formal notices or proceedings may be served.	Often binding	Medium	Include addresses, email rules if allowed, deemed receipt, and agent details.
Termination
Termination Rights	Allows parties to end the LOI or negotiation process.	Often binding	Medium	State notice requirements and effect on binding surviving clauses.
Expiry Date	Sets the date the LOI or offer lapses.	Often binding	Low	Distinguish expiry of offer, exclusivity, confidentiality, and cost obligations.
Survival Of Binding Terms	Confirms certain obligations continue after expiry or termination.	Often binding	Medium	List surviving clauses, especially confidentiality, costs, law, jurisdiction, and remedies.
Termination For Breach	Allows termination if binding LOI obligations are breached.	Often binding	Medium	Identify material breaches and whether cure periods apply.
Longstop Date	Sets final date for signing or completion target before process ends.	Depends on wording	Low	Clarify if it automatically ends exclusivity or only the commercial proposal.
Process term
Good Faith Negotiations	Encourages parties to negotiate honestly or constructively.	Depends on wording	High	Avoid bare agreements to negotiate specify concrete conduct if binding.
Reasonable Endeavours	Requires efforts to progress specified steps or approvals.	May be binding	High	Identify the objective, effort standard, deadline, and excluded burdens.
Other
No Reliance On Information	Limits reliance on information provided before final contract.	May be binding	High	Exclusions may be controlled by reasonableness rules under misrepresentation law.
Limitation Of Liability	Limits liability for breach of binding LOI obligations.	May be binding	High	Check reasonableness, carve-outs, fraud, confidentiality, and data breaches.
Equitable Remedies	Recognises injunctive relief may be sought for breach of binding terms.	Often binding	Medium	Common for confidentiality, exclusivity, non-solicit, and IP misuse breaches.
Authority To Sign	Confirms signatories have authority to bind the relevant party.	Often binding	Medium	Check company capacity, board approval, delegated authority, and execution block.
Corporate Capacity	Confirms each corporate party can enter the LOI.	May be binding	Medium	Confirm legal name, registration number, directors, and constitutional approvals.
Assignment	Controls transfer of rights or obligations under the LOI.	Often binding	Low	Permit group transfers only if confidentiality and liability remain clear.
Third Party Rights	Controls whether non-parties may enforce LOI terms.	Often binding	Medium	Exclude or expressly include rights under the Contracts Rights of Third Parties Act 1999.
Entire Agreement For Binding Terms	Clarifies the LOI is the complete agreement for binding provisions only.	May be binding	High	Do not undermine non-binding commercial terms or existing NDA priority.
Amendments In Writing	Requires changes to the LOI to be written and agreed.	Often binding	Low	Specify signed writing or email approval by authorised representatives.
Counterparts And Electronic Signature	Allows signature in counterparts and by electronic means.	Often binding	Low	Ensure signature method suits any deed, land, or corporate execution requirement.
Notices	Sets how formal notices under the LOI must be given.	Often binding	Low	Include addresses, recipients, email validity, and deemed delivery times.
No Partnership Or Agency	Prevents the LOI creating partnership, agency, or joint venture status.	Often binding	Low	Useful where parties collaborate before signing the final agreement.
Exclusivity
Exclusivity Remedy	Specifies remedies for breach of exclusivity obligations.	May be binding	High	Consider damages, reimbursement, injunctions, and proof of loss limitations.
Commercial term
Financing Condition	Makes the proposed deal subject to funding being obtained.	Usually non-binding	Medium	Clarify whether financing efforts are discretionary or subject to an endeavours duty.
Exclusivity
Conditions To Exclusivity	Links exclusivity to buyer progress, funding, or diligence milestones.	May be binding	High	State objective milestones and whether failure ends exclusivity automatically.
Process term
Conduct Pending Completion	Sets expectations for business conduct before final agreement or completion.	Depends on wording	High	Avoid control-like obligations that create competition or gun-jumping issues.
Transition Planning	Allows planning for handover, integration, or service migration.	May be binding	Medium	Restrict operational steps until contract, consents, and competition clearance.
Commercial term
Insurance Requirements	Flags insurance expected for interim work or final transaction.	May be binding	Medium	Make binding only if interim access, site visits, or services begin.
Process term
Site Access	Allows visits to premises for inspections or diligence.	Often binding	Medium	Include health and safety, insurance, escorting, timing, and confidentiality.
Health And Safety Compliance	Requires safe conduct during site visits or interim activities.	Often binding	Medium	Apply to inspections, visitors, contractors, equipment, and site rules.
Environmental Due Diligence	Permits investigation of environmental risks and compliance issues.	May be binding	Medium	Control intrusive surveys, permits, sampling, reinstatement, and third-party consent.
Commercial term
Indicative Warranties	Flags warranties expected in the final contract.	Usually non-binding	Medium	Say warranties are illustrative and subject to disclosure and negotiation.
Indicative Indemnities	Identifies indemnities expected in definitive documents.	Usually non-binding	High	Avoid operative indemnity wording unless an immediate indemnity is intended.
Indicative Restrictive Covenants	Outlines proposed non-compete or non-solicit terms for final contract.	Usually non-binding	High	Keep reasonable in scope, duration, territory, and legitimate interest.
Tax Structuring Assumptions	Records tax assumptions affecting structure, price, or completion mechanics.	Usually non-binding	High	Mark assumptions as non-advice and subject to specialist tax review.
Escrow Or Retention	Proposes holding part of consideration to cover claims or adjustments.	Usually non-binding	Medium	Identify amount, duration, release triggers, interest, and escrow agent later.
Working Capital Adjustment	Outlines proposed price adjustment for working capital at completion.	Usually non-binding	High	Define target, actual calculation, accounting policies, and dispute process later.
Confidentiality
Confidentiality Duration	Sets how long confidentiality obligations last.	Often binding	Medium	Use a fixed period or indefinite protection for trade secrets where appropriate.
Adviser Access	Permits advisers to receive information and assist negotiations.	Often binding	Low	Make the disclosing party responsible for adviser confidentiality breaches.
Privilege Preservation	Protects legal privilege when information is shared.	Often binding	Medium	State disclosure is limited and does not waive privilege where possible.
Clean Team Arrangements	Restricts sensitive information to approved independent reviewers.	Often binding	High	Use for competitors define clean team members, reports, and redactions.
Commercial term
Parent Support Or Guarantee	Records whether parent support may be required for final obligations.	Depends on wording	High	Do not create an unintended guarantee guarantees normally need written signed terms.
Security For Obligations	Outlines proposed security, charge, or collateral arrangements.	Usually non-binding	High	Leave operative security terms to definitive finance or security documents.
Confidentiality
Confidentiality Breach Notification	Requires prompt notice of unauthorised disclosure or misuse.	Often binding	Medium	Include mitigation, cooperation, and data breach escalation if personal data is involved.
Process term
Status Of Letter	Explains whether the LOI is binding, non-binding, or partly binding.	Often binding	High	Place prominently and avoid inconsistent mandatory language elsewhere.
Acceptance And Signature	Sets how the LOI is accepted or acknowledged.	Depends on wording	Medium	Clarify signature binds only listed binding clauses if that is intended.
Exclusivity
Exclusivity Start Date	Identifies when exclusivity obligations begin.	Often binding	Medium	Tie start to signature, payment, information access, or a specified date.
Exclusivity Carve-Outs	Allows specified actions despite exclusivity restrictions.	Often binding	High	Cover existing discussions, legal duties, unsolicited offers, and group transactions.
Early End To Exclusivity	Sets when exclusivity ends before the stated expiry date.	Often binding	Medium	Link to missed milestones, withdrawal, breach, or failure to provide funding evidence.
Other
Independent Advice	Records that parties may obtain their own legal, tax, and financial advice.	May be binding	Low	Useful where parties are unequal or commercially inexperienced.
Confidentiality
Confidentiality Exceptions	Excludes information already known, public, independently developed, or lawfully received.	Often binding	Medium	Require evidence that an exception applies and exclude wrongful publication.
Information Security	Requires appropriate security for shared documents and systems.	Often binding	Medium	Specify access controls, encryption, audit logs, and secure deletion.
Costs and expenses
Costs On Withdrawal	Allocates costs if a party withdraws or breaches process obligations.	May be binding	High	Define withdrawal events, causation, caps, evidence, and excluded costs.
Exclusivity
Consideration For Exclusivity	Records payment or mutual promises supporting exclusivity.	May be binding	High	Ensure enforceability by including clear consideration or deed execution if needed.
Other
Execution As A Deed	Provides deed execution where consideration may be absent or formalities apply.	May be binding	High	Use correct company or individual deed formalities and delivery wording.
Costs and expenses
Land Transaction Tax Assumptions	Flags Welsh land transaction tax assumptions for property deals.	Usually non-binding	Medium	Use for Welsh property distinguish from SDLT in England and Northern Ireland.
LBTT Assumptions	Flags Scottish land and buildings transaction tax assumptions.	Usually non-binding	Medium	Use for Scottish property align with Scots law property documentation.

Which Letter Of Intent Clauses Are Most Likely To Bind UK Parties?

In a UK letter of intent, commercial deal terms are commonly drafted as non-binding, while confidentiality, exclusivity, costs, governing law, dispute resolution, announcements, and return of information are often intended to be binding. The key drafting task is to say expressly which clauses are binding and which are not.

Why Is Clear Wording Important In A UK Letter Of Intent?

UK courts look at objective intention, certainty of terms, and whether the parties intended legal relations. A document labelled a letter of intent can still create binding obligations if its wording and conduct support that result. Use a clear non-binding statement for heads of terms, and separate it from binding obligations such as confidentiality or exclusivity.

What Clauses Need The Most Drafting Care?

Exclusivity and lock-out clauses: define the restricted conduct, duration, parties covered, and any permitted exceptions.
Confidentiality and personal data clauses: align disclosure controls with UK GDPR, the Data Protection Act 2018, and any existing NDA.
Costs, break fees, deposits, and good faith obligations: state whether payment or conduct obligations are binding, when they arise, and how they are calculated.
Subject to contract and no obligation to proceed wording: use these clauses consistently so the letter does not accidentally become a concluded contract.

How Should A UK Letter Of Intent Support A Future Contract?

The dataset shows that a strong letter of intent should separate deal framework clauses from binding process clauses. It should identify the transaction, timetable, due diligence scope, approvals, conditions, confidentiality, exclusivity, governing law, termination, and next steps, while making clear that the main transaction remains subject to definitive documents and required approvals.

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FAQs

What is a United Kingdom Letter of Intent Clause Library?

A United Kingdom Letter of Intent Clause Library is a collection of commonly used clauses for letters of intent governed by or intended for use in the UK.

What clauses are commonly included in a UK letter of intent?

Are letter of intent clauses legally binding in the UK?

Why should a letter of intent say which clauses are binding?

What is a non-binding clause in a letter of intent?

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