Are the provisions indicated in a letter-of-intent and/or term sheet legally binding?

In the context of mergers and acquisitions, a letter-of-intent (LOI) or term sheet typically outlines the preliminary agreements and intentions of the parties involved, but these documents are usually not legally binding. They serve as a starting point for negotiations and lay out the framework for the transaction, including critical elements like pricing, timelines, and preliminary conditions.

However, they are characterized by non-binding language that indicates the parties do not yet intend to create a legally enforceable obligation. It's important to note that while many provisions in these documents may be non-binding, certain specific provisions (like confidentiality or exclusivity clauses) can still be legally binding if clearly stated as such.

The notion that these documents are not legally binding unless explicitly stated preserves flexibility for the parties while they continue to negotiate the definitive agreement and conduct due diligence. Thus, stating that they are not legally binding is accurate because the intention behind an LOI or term sheet is primarily to outline terms for further discussion rather than to finalize an agreement.