The Commercial Letter of Intent is a crucial document in German business practice, typically used during the preliminary stages of significant commercial transactions or business relationships. It serves as a formal expression of interest and outlines the basic terms and structure of a proposed deal, while establishing certain binding obligations between parties. Under German law, particular attention must be paid to clearly distinguishing between binding and non-binding provisions, as the legal framework, including the BGB and HGB, provides specific requirements for contract formation and pre-contractual liability. The document is commonly used in mergers and acquisitions, joint ventures, strategic partnerships, and other significant business arrangements where parties need to formalize their intentions before proceeding with detailed due diligence and final agreement negotiations.

1. Letter Header and Date: Formal business letter header including sender's and recipient's details and date

2. Subject Line: Clear identification of the document as a Letter of Intent and brief description of the proposed transaction

3. Introduction: Brief introduction of the parties and their current business relationship or context

4. Transaction Overview: High-level description of the proposed transaction or business relationship

5. Key Terms: Outline of the main commercial terms being considered, clearly marked as preliminary and non-binding

6. Timeline: Proposed schedule for negotiations, due diligence, and target date for definitive agreement

7. Non-Binding Nature: Clear statement that the LOI is generally non-binding except for specific provisions

8. Binding Provisions: Explicit identification of which provisions are intended to be legally binding

9. Closing and Signatures: Formal closing, date, and signature blocks for both parties