When beginning negotiations with business partners or clients, it would be a smart decision to protect yourself with a confidentiality agreement and a letter of intent.
Confidentiality Agreements are legally binding and require that your potential partner or client refrains from disclosing or discussing any information to a third party. This protects your business even if the relationship never moves past the negotiation stage.
A Letter of Intent, also known as Memorandum of Understanding, is useful when negotiations are underway with several terms agreed upon, but both parties are not yet ready to enter into a binding agreement. A Letter of Intent is a memo that outlines what will be agreed upon, but is not yet signed and ready to be acted upon. While a Letter of Intent is not legally binding, it may contain certain legally binding clauses.
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