A letter of intent records the commercial shape of a deal before the definitive agreement. Whether any of it binds depends on what it says and how the parties behave.

Expressly binding provisions, customarily: confidentiality; exclusivity or no-shop for a stated period; expense allocation; governing law and dispute resolution; and publicity restrictions. These should be segregated in a clearly labelled section.

Expressly non-binding provisions, customarily everything commercial — price, structure, conditions — with a statement that no obligation arises until a definitive agreement is signed by both parties.

The duty to negotiate in good faith. Some jurisdictions imply one; some enforce an express agreement to negotiate in good faith while refusing to enforce an agreement to agree. Whether the letter intends such a duty should be stated either way, because silence is the litigated case.

Conduct matters. Parties who begin performing, share personnel, or announce the transaction undercut the non-binding recital. Reliance-based claims follow.

Damages for breach of an obligation to negotiate are typically reliance costs rather than the benefit of the bargain, which is a substantial practical limit.

Drafting discipline. Date the exclusivity period, define what a competing transaction is, and state precisely what happens on expiry.