Letter Of Intent For Dealership Template for Philippines

The Letter of Intent for Dealership is a crucial preliminary document used in the Philippine business context when a manufacturer or principal company intends to appoint a dealer for their products or services. This document serves as a formal expression of interest and outlines the basic terms and conditions that will form the foundation of the future detailed dealership agreement. While primarily non-binding, it typically includes certain binding provisions such as confidentiality and exclusivity during negotiations. The document must comply with Philippine commercial laws, including the Civil Code of the Philippines and the Philippine Competition Act, particularly regarding distribution relationships and fair trade practices. It's commonly used when parties want to document their serious intention to enter into a dealership arrangement while allowing time for due diligence, detailed negotiations, and the preparation of comprehensive agreements.

1. Date and Parties: Identification of the parties including full legal names, addresses, and company registration details for both the proposed principal/manufacturer and the proposed dealer

2. Background/Introduction: Brief context about the principal's business, products/services, and the intention to appoint the recipient as a dealer

3. Definitions: Key terms used in the letter that require clear definition, such as 'Territory', 'Products', 'Dealership Rights'

4. Purpose: Clear statement of intent to enter into a dealership arrangement, subject to conditions and further documentation

5. Proposed Terms: Outline of key commercial terms including territory, products/services covered, exclusivity (if any), and proposed duration

6. Conditions Precedent: Key conditions that need to be met before proceeding with the final dealership agreement

7. Timeline: Proposed schedule for negotiation, due diligence, and execution of the final dealership agreement

8. Non-Binding Nature: Clear statement that the LOI is non-binding except for specified clauses

9. Binding Provisions: Specific provisions that are intended to be binding, typically confidentiality, exclusivity during negotiation, and governing law

10. Signature Block: Space for authorized representatives of both parties to sign and date the letter