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A letter of intent (LOI) is the document that moves a website acquisition from "interested" to "in process." It captures the agreed terms before either party spends money on lawyers or extended due diligence, and gives the buyer an exclusivity window to investigate without competing buyers in the picture. Used correctly, an LOI protects both the buyer and seller — and prevents misunderstandings that kill otherwise-good deals.
An LOI is a short, mostly non-binding document — typically 1–3 pages — that summarizes the key terms a buyer and seller have agreed on before the formal Asset Purchase Agreement (APA) is drafted. It is not a contract. Signing an LOI does not obligate the buyer to purchase or the seller to sell at that price. What it does do:
For deals under $25,000, the LOI is often optional — many direct deals proceed straight to a purchase agreement. For deals over $50,000, especially those involving seller financing, earnouts, or complex multi-asset structures, the LOI is strongly recommended.
State the total purchase price and how it will be paid: all-cash at closing, a split (e.g., 80% cash / 20% seller note), or a combination with an earnout tied to post-close performance. If seller financing is included, specify the interest rate, term (months), and repayment structure.
List every asset transferring: domain name(s), website content, codebase, brand assets, social media accounts, email lists, affiliate program relationships, customer databases, supplier contracts, and any associated SaaS accounts or tools. Assets not listed may be disputed at closing. The more specific, the better.
Specify whether the deal is an asset purchase (buyer acquires specific assets, not the legal entity — most common for small deals) or an entity purchase (buyer acquires the LLC or corporation and all its assets and liabilities). Asset purchases are simpler and preferred by most buyers because they limit assumption of unknown liabilities.
This is the only truly critical binding provision. State the exact start date (date of signature), end date, and what the seller is prohibited from doing during the period: marketing the business, accepting other offers, or providing due diligence access to competing buyers. Typical length: 14–21 days for sub-$50k deals, 21–45 days for deals over $100k.
Define how long the buyer has to conduct due diligence and what information the seller will provide: P&L statements, payment processor exports, GA4 / Search Console access, affiliate network dashboards, and hosting/infrastructure documentation. The more specific, the fewer disputes arise during the process.
Reinforce the NDA (which should already be signed) by stating that all information exchanged during due diligence — financials, traffic data, customer information — is confidential and may not be shared with third parties or used for any purpose other than evaluating the acquisition.
For deals over $50,000, a good-faith deposit (typically 3–5% of the purchase price held in escrow) demonstrates the buyer's seriousness. Specify the conditions under which the deposit is refundable (e.g., material misrepresentation by the seller or clean due diligence walk-away) vs. non-refundable (buyer walks away without a substantiated reason).
Explicitly state that the LOI is non-binding on the transaction — neither party is legally obligated to close — except for the exclusivity and confidentiality provisions, which are binding. Without this language, courts in some jurisdictions have found LOIs to create implied obligations.
The most common misunderstanding about LOIs is thinking that because the deal terms are non-binding, the entire document is meaningless. That is incorrect. A properly drafted LOI has both binding and non-binding sections:
| Provision | Binding? | What it means |
|---|---|---|
| Purchase price | Non-binding | Can be renegotiated after due diligence reveals material issues |
| Deal structure | Non-binding | Asset vs. entity purchase can still change before the APA is signed |
| Exclusivity period | Binding | Seller cannot market the site or negotiate with other buyers |
| Confidentiality clause | Binding | Disclosed information cannot be shared or used outside this deal |
| Good-faith deposit | Binding | Refund conditions are contractually enforceable |
| Obligation to close | Non-binding | Neither party is obligated to complete the transaction |
Before drafting the LOI, reach verbal agreement on purchase price, deal structure, and exclusivity period length. Drafting an LOI before verbal alignment means re-drafting it as negotiations shift — wasted time for both parties.
Use the 8 sections above as a checklist. For deals over $50k, have a lawyer review the draft before sending. The buyer usually drafts the LOI and sends it to the seller, though sellers can also initiate if they want to standardize their transaction process.
Both parties should read carefully. Common negotiation points: exclusivity period length, deposit amount and refund conditions, scope of due diligence access, and what constitutes a 'material adverse finding' that allows the buyer to walk without losing their deposit.
Once signed, the exclusivity period begins. Buyers should start due diligence the same day. Every day of the exclusivity window spent not investigating is time wasted. Sellers should prepare their data room in advance so the buyer can move quickly.
Request and verify: P&L statements (12 months minimum), payment processor exports, GA4 and Google Search Console access, affiliate and ad network data, hosting invoices, supplier or partner contracts, and legal documents. Document all discrepancies — these become renegotiation levers or walk-away triggers.
Clean due diligence leads directly to drafting the formal Asset Purchase Agreement. Material issues (revenue lower than claimed, undisclosed traffic decline, hidden technical debt) justify a price renegotiation. The LOI does not lock you into the original price if the facts don't match.
Once the APA is signed, fund escrow. The seller transfers all assets. Escrow releases funds once the buyer confirms satisfactory transfer. The transition period — typically 2–4 weeks of seller support — begins at closing.
Mistake: Exclusivity period too short
Buyers who agree to 10-day exclusivity on a complex deal end up rushing due diligence or requesting an extension, which irritates the seller. Be realistic: if you need 21 days to properly verify the business, negotiate for 21 days up front.
Mistake: Vague asset list
Listing 'the website and all related assets' creates disputes at closing about what is or isn't included. Name every asset explicitly: the domain, the codebase, the GA4 property, the email list platform accounts, the social profiles, and any contracts.
Mistake: No non-binding statement
Without an explicit non-binding clause on deal terms, some jurisdictions interpret a signed LOI as creating legal obligations. Always include language stating the LOI is non-binding except for the exclusivity and confidentiality provisions.
Mistake: Omitting deposit refund conditions
If a good-faith deposit is included, specify precisely when it is refundable (seller misrepresentation, buyer walks away on legitimate due diligence findings) vs. forfeited (buyer walks away without substantiated reason). Ambiguity here causes disputes.
Mistake: Signing an LOI before NDA
The NDA should be signed before any detailed financials are exchanged — ideally before the LOI is even drafted. Some buyers skip the NDA thinking the LOI covers it. Always have a separate NDA in place first.
Mistake: Treating the LOI as the final deal
Some buyers relax after signing an LOI, thinking the deal is done. It isn't. The LOI only starts the process. Due diligence, price renegotiation, and APA negotiation all still lie ahead. Treat the LOI as the starting gun, not the finish line.
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