Letter of Intent (Distribution Agreement)

Summary

This precedent is a letter of intent ("LOI") for a proposed distribution arrangement between a manufacturer/supplier and a distributor in Canada. It is intended to frame negotiations toward a long-form distribution agreement while making clear which LOI provisions are binding and which are not. It is jurisdiction-neutral but must be tailored to the governing province/territory. This precedent includes practical guidance and drafting notes. The LOI outlines the proposed appointment (non-exclusive or exclusive), the intended term/renewal, the negotiation timetable, and a short list of expected long-form topics (orders, pricing, payment, shipping, warranties, indemnities, compliance, termination and post-termination). It also includes binding terms typically needed during negotiations (confidentiality, expenses, no third-party beneficiaries, governing law/jurisdiction), and a termination/survival framework. Key drafting considerations include (i) avoiding accidental binding commitments, ...