Which type of document typically outlines the terms of a proposed transaction before final agreements?

The type of document that typically outlines the terms of a proposed transaction before final agreements are made is the Letter of Intent. This document serves as a preliminary agreement that lays out the basic terms and intentions of the parties involved in the transaction. It often includes key elements such as the purchase price, structure of the deal, and any conditions that must be met before the final agreement can be executed.

The purpose of a Letter of Intent is to provide a framework for further negotiations and due diligence, ensuring that all parties are aligned on the essential aspects of the transaction before investing significant time and resources into drafting more detailed agreements.

In contrast, a Non-Disclosure Agreement focuses on protecting confidential information shared between parties rather than outlining transactional terms. A Memorandum of Understanding can also indicate an intention to enter into a contract but is generally less formal and more of a broad framework than the specific terms typically found in a Letter of Intent. Finally, a Share Purchase Agreement is a binding contract that finalizes the purchase of shares and includes comprehensive detailing of the transaction; this comes after the initial negotiations captured in the Letter of Intent.