The Conditional Letter of Intent is a crucial document in South African commercial practice, typically used in the preliminary stages of significant business transactions. It serves as a bridge between initial discussions and the final agreement, setting out the framework for negotiation while protecting parties' interests. The document is particularly valuable in complex transactions where parties need to outline their intentions and establish certain binding obligations (such as confidentiality and exclusivity) while maintaining flexibility through conditions precedent. Under South African law, which combines Roman-Dutch legal principles with English common law influences, the Conditional Letter of Intent must carefully distinguish between binding and non-binding provisions to ensure legal certainty and enforceability. It's commonly used in mergers and acquisitions, joint ventures, property developments, and other significant commercial transactions where parties need to establish clear parameters for their proposed deal while maintaining certain conditions that must be met before proceeding to a definitive agreement.

1. Letterhead and Date: Official letterhead of the sending party and current date

2. Recipient Details: Full name and address of the receiving party

3. Subject Line: Clear identification of the document as a Conditional Letter of Intent and brief reference to the proposed transaction

4. Opening Statement: Formal introduction and identification of all parties involved

5. Transaction Overview: Brief description of the proposed transaction or business relationship

6. Key Terms: Outline of the principal terms and conditions of the proposed transaction

7. Conditions Precedent: Clear listing of all conditions that must be met before proceeding with the transaction

8. Timeline: Proposed schedule for satisfying conditions and moving forward with the transaction

9. Binding Provisions: Specification of which provisions are legally binding (typically confidentiality, exclusivity, and governing law)

10. Closing and Signatures: Formal closing, signature blocks for all parties