A Letter of Intent to Sell Products is commonly used in New Zealand business transactions as a preliminary step before entering into a formal sales agreement. This document is particularly useful when parties need to outline their initial understanding and commitment while allowing room for further negotiation and due diligence. It typically includes proposed terms such as product specifications, pricing structures, delivery arrangements, and timeline for finalizing the formal agreement. While generally non-binding, certain provisions like confidentiality may be explicitly made binding. The document must comply with New Zealand's legal framework, including the Contract and Commercial Law Act 2017, Fair Trading Act 1986, and Consumer Guarantees Act 1993. It serves as a roadmap for negotiation and helps parties align their expectations before committing to a final agreement.
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1. Letter Header: Formal business letter header including date, sender's address, recipient's address
2. Recipient Introduction: Formal greeting and introduction of the parties involved
3. Purpose Statement: Clear statement of intent to enter into a product sale arrangement
4. Product Description: Brief but clear description of the products to be sold
5. Proposed Key Terms: Overview of principal terms including quantity, pricing structure, and delivery expectations
6. Duration and Timeline: Proposed timeframe for finalizing the formal agreement and intended duration of the arrangement
7. Non-Binding Nature: Statement clarifying the non-binding nature of the LOI (except for any specifically binding terms)
8. Next Steps: Outline of the process to move forward toward a formal agreement
9. Closure: Formal letter closing, signature blocks for both parties
1. Confidentiality: Include when sensitive information will be exchanged during negotiations
2. Exclusivity: Add when parties agree not to negotiate with others during a specified period
3. Due Diligence: Include when preliminary investigation of products, certifications, or capabilities is required
4. Costs and Expenses: Add when there's a need to specify who bears the costs of negotiation and due diligence
5. Governing Law: Include when parties want to specify applicable law for any binding provisions
6. Territory Rights: Add when the sale arrangement involves specific geographic restrictions or rights
1. Product Specifications: Detailed technical specifications or product descriptions
2. Preliminary Pricing Schedule: Indicative pricing structure and volume-based discounts if applicable
3. Proposed Timeline: Detailed timeline for negotiation, due diligence, and agreement finalization
4. Required Certifications: List of necessary product certifications or compliance requirements
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