A Letter of Intent to Buy a Business is commonly used in New Zealand as the first formal step in a business acquisition process. It is typically prepared when a potential buyer has identified a target business and wants to formalize their serious interest while maintaining flexibility for negotiations. The document outlines preliminary terms including proposed purchase price, exclusivity period, and due diligence requirements, while typically keeping only specific provisions like confidentiality binding. Used within the framework of New Zealand commercial law, it provides protection for both parties during the negotiation phase and serves as a roadmap for the transaction. This document is particularly important in complex business sales where detailed due diligence is required and multiple stakeholders are involved.

1. Date and Parties: Identification of the potential buyer and seller, including full legal names, addresses, and any relevant company registration details

2. Background/Introduction: Brief context about the proposed transaction and purpose of the letter

3. Business Description: Clear identification of the business being considered for purchase, including trading name, location, and nature of business

4. Purchase Price Range: Indicative price range or proposed purchase price, subject to due diligence

5. Key Terms: Outline of primary terms and conditions for the proposed transaction

6. Due Diligence: Framework for the due diligence process, including timeframes and access requirements

7. Confidentiality: Obligations regarding confidential information shared during negotiations

8. Exclusivity Period: Duration during which the seller agrees not to negotiate with other potential buyers

9. Timeline: Proposed schedule for key milestones including due diligence, negotiations, and target completion date

10. Non-Binding Nature: Clear statement about which provisions are binding (typically confidentiality and exclusivity) and which are non-binding