AI Prompts to Interrogate an LOI or Term Sheet

A new guide from an unnamed source provides AI prompts to help sellers interrogate a letter of intent (LOI) or term sheet, emphasizing that binding provisions (exclusivity, confidentiality, expenses) take effect on signature while economic terms (price, escrow, earnout) are typically non-binding. The guide warns that 'to be determined in the purchase agreement' is a concession, and that a $10M headline price can yield roughly $7M at closing after holdbacks and adjustments. It stresses that AI cannot provide legal advice and that a qualified solicitor should review the document before signing.

AI Prompts to Interrogate an LOI or Term Sheet Understand the document before your lawyer explains it — so their time goes on judgement, not translation. Short answer: An LOI is the non-binding document that binds you . The economics — price, escrow, earnout, working capital — are usually non-binding . The exclusivity, confidentiality and expense provisions usually are binding. So on signature you surrender your only real leverage, the ability to talk to another buyer, while retaining no certainty on price. Everything after that is negotiated from a weaker position — which is why “to be determined in the purchase agreement” is not a deferral, it’s a concession. This guide does not review your LOI, and neither does AI. Nothing here is legal advice, and no prompt below produces legal advice. AI cannot determine whether a clause is enforceable, whether terms are appropriate for your circumstances, how a court in your jurisdiction would interpret anything, or whether you should sign. What it can do is make you a better-prepared client. These prompts translate the document into plain language, list what it leaves open, and generate a focused question list — so you arrive at legal review understanding what you’re asking about, and your solicitor’s time goes on judgement rather than explanation. Have a qualified solicitor review the actual document before you sign it. Binding provisions take effect on signature, exclusivity removes your ability to approach other buyers, and an LOI shapes every negotiation that follows. This is the cheapest point in the entire transaction to take advice, and the most expensive point at which to skip it. TL;DR — Key Takeaways Everything that binds you is binding; everything about the money is not. Exclusivity, confidentiality and expenses typically bind. Price, escrow and earnout typically don’t. Your leverage peaks the moment before you sign. Exclusivity of 60–90 days removes your alternative just as diligence begins. “To be determined in the purchase agreement” means you’ve conceded it. Open terms get settled later by whoever holds leverage — and after exclusivity, that isn’t you. Headline ≠ proceeds. A $10M price can be roughly $7M of cash at closing once holdbacks, earnout and adjustments apply. Undefined earnout metrics are the classic later dispute. “EBITDA” without stated accounting methodology is an argument waiting to happen. ✔ Best for Sellers who’ve received an LOI and want to understand it before the meeting with counsel, and advisers preparing clients for that conversation. ✕ Skip if You’ve already signed and are in dispute — that needs your solicitor now — or you want someone to tell you whether the deal is good, which requires advisers who know your situation. On this page What’s actually binding in an LOI? Most LOIs are non-binding overall, with specific provisions that bind. The asymmetry is worth seeing laid out, because it’s the structural feature that shapes everything else. ✕ Typically binding on you - Exclusivity / no-shop - Confidentiality - Expense allocation - No-hire / non-solicitation - Governing law and jurisdiction ◆ Typically NOT binding - Purchase price - Working capital calculation - Form of the transaction - Price allocation - Escrow and holdback amounts - Earnout mechanics Read those two columns together. Every provision constraining your freedom of action is binding. Every provision concerning how much money you receive is not. That isn’t a drafting accident — it’s the normal shape of the instrument, and it’s why the document deserves more attention than its “non-binding” label suggests. One drafting point worth asking your solicitor about specifically. Well-drafted LOIs state expressly which sections are binding — language along the lines of “this LOI, other than Sections X, Y and Z, is intended only as a summary of proposed terms.” Where that carve-out language is absent or unclear , guidance notes a court may treat more of the document as binding than the parties intended, or enforce provisions that were meant to be indicative. Ask your solicitor to confirm exactly which provisions bind you on signature. Why your leverage peaks before you sign Exclusivity is the whole game. A no-shop obligation requires you to stop marketing the business and cease conversations with other potential buyers — commonly for 60 to 90 days , sometimes 120, with buyers routinely pushing for longer. The timing is what matters. You surrender your alternative at precisely the moment the buyer begins the detailed diligence that may surface reasons to reduce the price. If they seek to re-trade in week seven, your realistic options are to accept, to negotiate from a position with no competing bidder, or to walk away and restart a process that has already consumed months. | Exclusivity period | Time without an alternative | Practical note | |---|---|---| | 60 days | ~8.6 weeks | Middle-market diligence commonly runs 8–10 weeks, so this can expire mid-process — which is itself a negotiating moment. | | 90 days | ~12.9 weeks | Comfortably covers a standard diligence period. | | 120 days | ~17.1 weeks | Four months of no alternative. Worth understanding precisely what justifies it. | What happens when exclusivity expires, whether it auto-renews, and what conditions attach to extension are all questions for your solicitor — and all questions best asked before signature rather than in week nine. Why headline price isn’t what you receive The number in the LOI and the number that reaches your account are different, sometimes substantially. Published guidance illustrates a $10M headline reducing to roughly $7M at closing once holdbacks, earnout deferral and adjustments apply. An important nuance, honestly stated: escrow and earnout aren’t necessarily lost . Escrow may release after the survival period; an earnout may be earned in full. But roughly 28% of consideration is at risk or deferred in this illustration — and the terms governing whether you actually receive it are set at the LOI stage, often in a single sentence, and frequently left open entirely. Why “to be determined” is a concession Every term deferred to the definitive agreement will be settled later by whoever has more leverage at that point. After exclusivity, that isn’t you. Guidance is blunt about this: where escrow percentage, holdback duration, working capital target and earnout measurement are left “to be determined in the purchase agreement,” the seller’s negotiating window has effectively closed. | Left open in the LOI | What tends to happen later | |---|---| Escrow percentage & duration | Set in the SPA, informed by whatever diligence surfaced. Issues found in diligence commonly become the escrow schedule. | Working capital target | A technical calculation with real cash consequences. If the mechanism is unclear, buyers push for separate adjustment protection. | Earnout measurement | Metrics stated as “revenue” or “EBITDA” without specifying accounting methodology, add-backs or GAAP treatment are a well-documented source of post-closing dispute. | Diligence scope & cut-off | Without a defined scope and end date, investigation can extend, with minor findings used as leverage. | Indemnity caps & baskets | Determines your residual exposure after closing. Rarely detailed at LOI stage, materially valuable when it is. | None of this means every term must be resolved in the LOI — some genuinely can’t be. It means you should know which are open, and decide deliberately which to press on now, in consultation with your adviser and solicitor. Get the 40 Questions to Ask Before Signing The complete question list for your solicitor and corporate finance adviser, organised by topic and priority, plus the missing-terms checklist and the leverage map. Free. Prompt 1: Clause-by-clause translation Understanding what you’re reading is not the same as knowing whether to accept it. This prompt does the first job only. CONTEXT Transaction: SALE OF MY BUSINESS / ASSET SALE / SHARE SALE — as far as I understand it Jurisdiction: COUNTRY/STATE — for flagging only My experience: FIRST TIME SELLER / SOLD BEFORE THE DOCUMENT PASTE THE LOI. Redact party names, addresses and anything identifying first — see the data note in this guide. YOUR TASK Translate, clause by clause. For EACH clause: 1. THE ORIGINAL — quote the clause reference and heading. 2. PLAIN ENGLISH — what this appears to say, in ordinary language a non-lawyer would understand. 3. WHAT IT ASKS OF ME — what I would be agreeing to, framed as an obligation or a right. 4. WHAT IT DOESN'T SAY — anything a clause of this type commonly addresses that this one is silent on. 5. THE QUESTION — one specific question to put to my solicitor about this clause. Then, separately: A. BINDING OR NOT — list which clauses the document itself states are binding, quoting the language relied on. If the document is unclear or silent on this, say so prominently — that is itself a question for counsel. B. THE THREE CLAUSES I should understand best before any conversation, and why those three. HARD RULES: - Do NOT advise whether any term is fair, market-standard, or acceptable. You cannot know my circumstances. - Do NOT assess enforceability. That is jurisdiction-specific and a matter for a qualified lawyer. - Do NOT recommend that I sign, refuse, or negotiate anything. - Where a clause is ambiguous, say it is ambiguous and flag it for counsel rather than resolving it. - If you are uncertain what a term means in this context, say so rather than guessing. - End with: which clauses most need professional review. Prompt 2: The missing terms audit Absence is harder to notice than presence. Reading a document, you assess what’s on the page. The risk sits in what isn’t. THE DOCUMENT: PASTE — REDACTED DEAL CONTEXT: APPROXIMATE SIZE, SECTOR, BUYER TYPE IF KNOWN — PE / STRATEGIC / SEARCH FUND / INDIVIDUAL Identify what this document leaves open. A. EXPLICITLY DEFERRED — every term stated as "to be determined", "to be agreed", "as set out in the definitive agreement" or similar. Quote each. B. SILENT ALTOGETHER — terms that a document of this type commonly addresses but this one doesn't mention at all. Consider without assuming any is required here : escrow amount and release timing · working capital mechanism and target · earnout metric definitions and accounting basis · diligence scope and cut-off date · what happens if exclusivity expires · conditions to closing · treatment of transaction expenses · indemnity caps and baskets · what happens to key employees · restrictive covenants on me post-sale. C. THE VAGUE ONES — terms that are mentioned but defined loosely enough to be argued about later. Earnout metrics without stated accounting methodology are the classic example. Quote the language. D. RANKED BY CONSEQUENCE — order everything above by how much the outcome could move depending on how it's settled. Explain the mechanism, not a number. E. THE QUESTIONS — for each item in the top five, the specific question to ask my solicitor, and the separate question to ask my corporate finance adviser. These are different professionals answering different things. HARD RULES: - Do NOT tell me what these terms "should" be. Market norms vary and your information may be outdated or wrong. - Do NOT estimate financial impact in numbers. - Do NOT suggest negotiating positions. - Flag clearly that an absent term is not necessarily a problem — it may be normal at this stage, and that judgement belongs to my advisers. Prompt 3: What a seller’s lawyer would push back on This anticipates the conversation, it doesn’t replace it. The value is walking in already understanding which areas are likely to occupy the discussion. THE DOCUMENT: PASTE — REDACTED You are helping me prepare for a meeting with my solicitor. You are NOT acting as my solicitor and must not give legal advice. Based on how documents of this type are generally structured, identify: 1. THE AREAS A SELLER'S LAWYER WOULD TYPICALLY EXAMINE CLOSELY in a document like this. For each: what the general concern is, and why it matters to a seller. Describe the category of issue, not a conclusion about my document. 2. WHERE THIS DOCUMENT IS UNUSUALLY SILENT compared to what such documents commonly cover. 3. WHAT I SHOULD BE ABLE TO EXPLAIN when I walk in — the commercial background my solicitor will need from me that isn't in the document. They can read the LOI; they can't know my business, my timeline, my alternatives or what I actually want. 4. WHAT I SHOULD BRING — documents, figures and context that would make the review faster and cheaper. 5. THE DECISIONS THAT ARE MINE, NOT MY LAWYER'S — commercial judgements only I can make, so I don't spend legal time on them or mistake them for legal questions. HARD RULES: - Frame everything as "a lawyer would typically examine", never "your lawyer will object to X" or "this clause is problematic". - Do NOT characterise any term as unfair, aggressive or unusual. You lack the context to judge that. - Do NOT suggest what to ask for instead. - Repeat clearly that this is preparation, and that the actual assessment requires a qualified lawyer reading the real document with knowledge of my situation. Prompt 4: The question list for counsel WHAT I NOW UNDERSTAND: PASTE OUTPUTS FROM PROMPTS 1-3 MY SITUATION: Timeline pressure? Other interested parties? Do I need to sell? What matters most to me — price, certainty, speed, what happens to my team? BUDGET FOR LEGAL REVIEW: IF LIMITED, SAY SO Build my agenda for the meeting. 1. THE PRIORITY QUESTIONS — ranked, so that if we run out of time the most consequential are covered. Group into: what binds me on signature · exclusivity and its consequences · open economic terms · process and timing · my position if terms change later. 2. QUESTIONS ABOUT MY SPECIFIC SITUATION — given what I've told you about my circumstances, what should I specifically ask that a generic checklist wouldn't cover? 3. WHAT TO ASK MY CORPORATE FINANCE ADVISER INSTEAD — separate the commercial questions from the legal ones so I use each professional for what they're for. 4. WHAT I NEED TO DECIDE BEFORE THE MEETING — commercial positions only I can hold, which will shape the advice I get. 5. THE FOLLOW-UP — what to ask at the end so I leave knowing what happens next, what it will cost, and what my solicitor needs from me. 6. IF BUDGET IS TIGHT — which questions deliver the most protection per hour of legal time. Be honest that reviewing an LOI properly is among the cheapest legal spend in a transaction relative to what it protects. Do not answer any of these questions yourself. Before you paste anything: redact. An LOI is confidential and usually covered by a confidentiality provision in the document itself. Remove party names, addresses, individuals’ names and any identifying detail before putting it into an AI tool. Prefer a business or enterprise tier with a data processing agreement over a consumer account. If in doubt about whether the confidentiality provision permits this at all, ask your solicitor first — that question takes two minutes and is itself a good use of the relationship. A real translation, run in full Two clauses from a redacted LOI, showing what the translation prompt produces — and, importantly, what it declines to do. SECTION 5 — EXCLUSIVITY. From the date hereof until the earlier of i the date that is one hundred twenty 120 days following the date hereof, or ii the termination of discussions by Buyer in writing, Seller shall not, and shall cause its representatives not to, solicit, initiate, encourage or respond to any inquiry, proposal or offer from any person other than Buyer relating to any acquisition of the Company. This Section 5 shall be binding. SECTION 3 c — EARNOUT. In addition to the Base Consideration, Seller may receive additional consideration of up to $1,500,000 based on the Company achieving EBITDA targets for the twelve months following Closing, such targets and payment mechanics to be set forth in the Definitive Agreement. SECTION 5 — EXCLUSIVITY Plain English | For 120 days from signing, you may not talk to, respond to, or encourage any other potential buyer. Nor may your advisers or anyone acting for you. The buyer can end this early by giving written notice; you cannot. | What it asks of you | To remove every alternative buyer from the process for four months, and to police your own representatives’ conduct as well as your own. Note “respond to” — this appears to cover even unsolicited approaches. | What it doesn’t say | It doesn’t state what happens if the 120 days expire without a signed agreement. It doesn’t provide for extension terms. It doesn’t appear to require the buyer to do anything during the period — no diligence milestones, no obligation to proceed in good faith, no financing commitment. The termination right runs one way. | Question for counsel | “Section 5 is expressed as binding and runs 120 days with a unilateral buyer termination right and no reciprocal obligations. What are my options here, and what would normally accompany an exclusivity provision of this length?” | SECTION 3 c — EARNOUT Plain English | You might receive up to $1.5M more, depending on the company hitting EBITDA targets in the year after closing. What those targets are, and how you get paid, will be decided later. | What it asks of you | To accept that a portion of consideration is contingent on performance measured after you’ve sold — and to agree the mechanics later. | What it doesn’t say | This is the significant gap. It doesn’t define: what EBITDA means here which accounting basis, which add-backs, whether buyer overheads or management charges can be allocated to the business ; what the targets are; who calculates and who verifies; what happens if the buyer changes the business in ways that affect EBITDA; whether you have any operational involvement or protections; when payment occurs; what happens on a further sale during the earnout period; and whether there’s any dispute mechanism. | Question for counsel | “The earnout is up to $1.5M with the metric and mechanics deferred to the definitive agreement. What are the implications of leaving this open, and what would you normally want established at this stage?” | Binding or not: Section 5 states expressly that it binds. The document should be checked for equivalent language elsewhere, and for a general provision identifying which sections bind and which don’t. If no such general provision exists, flag that to counsel as a priority — where carve-out language is absent, more of a document may be treated as binding than intended. The three clauses to understand best: Section 5 it binds you immediately and for four months , Section 3 c the largest sum with the least definition , and whichever provision addresses working capital — which, on this document, appears to be none. This translation does not assess whether any of these terms is reasonable, standard, or acceptable in your circumstances. Those are questions for a qualified solicitor reading the full document with knowledge of your situation. Note what the output did. It explained, it identified silence, and it produced questions. It never said the 120-day exclusivity was aggressive, never said the earnout was badly drafted, and never suggested what to ask for. Those judgements need a lawyer who knows your position — and you’ll get better ones now that you understand what you’re asking about. Level-up: the leverage map This is the frame that makes everything else actionable, and it’s the part no LOI checklist provides. Your leverage isn’t constant across the transaction — it peaks immediately before signature and declines from there. The useful question for every open term is therefore not “is this good?” but “when is the last moment I can influence this, and what does waiting cost?” Help me map my negotiating leverage across this transaction. You are not advising me on strategy or terms — you are helping me understand the SEQUENCE so I can discuss it properly with my advisers. THE DOCUMENT: PASTE — REDACTED MY POSITION: Other interested parties: ANY? AT WHAT STAGE? Do I need to sell: TIMELINE PRESSURE, HONESTLY Exclusivity requested: LENGTH Buyer type: PE / STRATEGIC / SEARCH FUND / INDIVIDUAL Where I am: LOI RECEIVED, NOT SIGNED Six sections: A. THE LEVERAGE TIMELINE — describe how a seller's negotiating position typically changes across these stages: before LOI signature · during exclusivity · after diligence findings emerge · at definitive agreement · at closing. Explain the mechanism driving each shift. B. TERM BY TERM — for every open or vague term in this document, indicate whether it is generally easier to influence BEFORE signature or whether it is normally settled later, and what typically causes the difference. Present this as a table. C. THE ONE-WAY DOORS — which provisions, once agreed, are difficult to revisit? Distinguish between terms that remain genuinely negotiable and terms that in practice don't. D. WHAT PRESERVES LEVERAGE — describe, in general terms, the mechanisms that sellers and their advisers use to maintain position during exclusivity. Describe the categories; do not recommend a course of action for me. E. THE BUYER'S SEQUENCE — based on the buyer type I've described, how does a buyer of that kind typically run a process from LOI to close, and at which points do they usually seek to revisit terms? Knowing the shape of the process in advance is not the same as predicting what my buyer will do. F. THE QUESTIONS THIS RAISES — the specific questions this analysis suggests I should put to my corporate finance adviser commercial and my solicitor legal , listed separately. HARD RULES: - Do NOT tell me what to negotiate, what to concede, or what to insist on. - Do NOT predict what this buyer will do. You don't know them and neither do I with any certainty. - Do NOT characterise the buyer's conduct or motives. - Everything here is a general description of how such processes commonly work, to inform conversations with qualified advisers who know my situation. Why section C is the one to act on: some terms genuinely remain negotiable through to the definitive agreement, and some are settled the moment you sign even though the document calls them non-binding. Knowing which is which — before signature, with your adviser — is the difference between deliberately deferring a term and accidentally conceding it. Section E is context, not prediction. Different buyer types run processes differently, and understanding the general shape helps you ask better questions. It does not tell you what your buyer will do, and treating it as though it does would be a mistake. What AI cannot do here | Never | Why | |---|---| Tell you whether to sign | That depends on your alternatives, timeline, tax position, family circumstances and risk tolerance. No model has this. | Assess enforceability | Jurisdiction-specific and fact-specific. Getting this wrong has consequences that survive the transaction. | Say whether terms are “market” | Norms vary by size, sector, geography and cycle, and a model’s information may be outdated or simply wrong. Your adviser sees actual deals. | Draft or redline clauses | A clause that looks reasonable and is unenforceable is worse than no clause. This is drafting, and drafting is legal work. | Advise on tax structuring | Deal structure drives tax outcome and can consume a large share of proceeds. Specialist territory, and timing-sensitive. | Hold your confidential document | Redact before pasting, use an appropriate tier, and check whether the confidentiality provision permits it at all. | Have a qualified solicitor review the actual, unredacted document before you sign. Not after. Not “if something comes up.” Before. Binding provisions take effect on signature. Exclusivity removes your alternatives at the moment you most need them. And the terms this document leaves open will be settled later, from a weaker position. Reviewing an LOI properly is among the least expensive legal work in an entire transaction, measured against what it protects. Which model for which task? Reasoning tier · gap audit & leverage map Enterprise tier · always, for deal documents Use a large-context model so the whole document is held at once — clause-by-clause translation degrades badly if the document is chunked, and the missing-terms audit depends on seeing everything together. Run the gap audit and leverage map on a reasoning tier . For deal documents specifically, use a business or enterprise tier with a data processing agreement , and redact regardless. Deal conventions and drafting practice evolve. Nothing in this guide is a substitute for current advice from a solicitor practising in your jurisdiction. We re-verify sources on each review. Frequently asked questions Is a letter of intent legally binding? Usually partly. Most letters of intent are described as non-binding overall, while specific provisions commonly bind — typically exclusivity or no-shop, confidentiality, expense allocation, no-hire and governing law. Well-drafted documents state expressly which sections are binding, and where that language is absent a court may treat more of the document as binding than the parties intended. Whether any particular document binds you is a legal question for your solicitor, not something to assume. What is an exclusivity or no-shop clause? It’s an undertaking to stop marketing the business and to cease discussions with other potential buyers for a defined period, commonly 60 to 90 days and sometimes longer. It’s typically one of the binding parts of a letter of intent. Its practical effect is that the seller gives up the ability to create competitive tension at the moment the buyer begins detailed diligence. What are the biggest red flags in an LOI? Terms deferred to the definitive agreement are the most significant, particularly escrow percentage, holdback duration, working capital target and earnout measurement method. Earnout metrics stated without defining accounting methodology are a frequent source of later dispute. An exclusivity period that is long or open-ended, and the absence of a defined diligence scope or cut-off date, both reduce a seller’s position over time. Why does headline price differ from what I receive at closing? Because escrow or holdback amounts, deferred earnout consideration and working capital adjustments are deducted from or withheld against the headline figure. Published guidance illustrates a $10M headline price reducing to approximately $7M at closing once holdbacks of 10–15%, earnout deferral and adjustments are applied. Escrow and earnout aren’t necessarily lost, but the terms governing them are usually set at the letter of intent stage. Can AI review my letter of intent? It can help you understand and prepare, and it cannot advise you. AI can translate clauses into plain language, list terms the document leaves open, and generate questions for your solicitor. It cannot determine whether a provision is enforceable, whether terms are appropriate for your circumstances, or whether you should sign. Those require a qualified lawyer in the relevant jurisdiction reviewing the actual document. Should I negotiate the LOI or wait for the purchase agreement? Terms are generally easier to influence before signing than afterwards, because signing typically triggers exclusivity and removes the alternative of approaching another buyer. Guidance consistently notes that details left “to be determined in the purchase agreement” have effectively left the seller’s negotiating window. Whether and how to negotiate any specific term is a question for your adviser and solicitor. How long should an exclusivity period be? Commonly cited ranges are 60 to 90 days, extending to 120 in some transactions, with buyers often seeking longer. Because middle market diligence frequently runs eight to ten weeks, a shorter period may expire before diligence concludes — which itself becomes a negotiating point. The appropriate length depends on transaction complexity and is a matter to discuss with your corporate finance adviser and solicitor. What questions should I ask my lawyer about an LOI? Prioritise which provisions bind on signature, what the exclusivity commits you to and for how long, which economic terms are left open and what happens if they’re not agreed, how escrow and earnout mechanics would operate, what the document says about diligence scope and timing, and what your position is if the buyer seeks to change terms later. Preparing specific questions in advance makes legal review faster and more useful. Download: The 40 Questions to Ask Before Signing The full question list organised by topic and priority, split between what to ask your solicitor and what to ask your corporate finance adviser, plus the missing-terms checklist and the leverage map worksheet. Advisers: supplied unbranded and free to white-label for client use. Enter your email and we’ll send the list plus occasional exit-planning updates. Unsubscribe anytime. Written by the Narracomm team Narracomm is a communications and content strategy team that helps business owners, operators, and founders use AI to produce clear, credible, high-performing work. This guide must carry a named reviewer who is a qualified corporate or M&A solicitor in the primary jurisdiction addressed, with practising credentials and review date shown. Given the subject matter, legal review before publication is not optional — and the disclaimers above should themselves be reviewed by that solicitor. Sources & further reading The letter of intent isn’t a done deal: what every seller needs to know before signing https://www.mondaq.com/unitedstates/contracts-and-commercial-law/1811240/the-letter-of-intent-isnt-a-done-deal-what-every-seller-needs-to-know-before-signing Morgan & Westfield — M&A basics: the letter of intent https://morganandwestfield.com/knowledge/letter-of-intent/ Letters of intent in M&A: what’s binding https://fasthofflawfirm.com/blog/ma-letter-of-intent CT Acquisitions — What is an LOI in a business sale? A 2026 seller’s guide https://ctacquisitions.com/what-is-an-loi-business-sale-2026/ Acquisition Stars — LOI vs term sheet https://acquisitionstars.com/loi-guides/loi-vs-term-sheet Livmo — Escrow holdbacks in M&A: seller guide https://livmo.com/blog/escrow-holdback-ma/ Earnouts, escrows and holdbacks in small business sales https://phillysmallbusinesslawyer.com/business-success-tips/earnouts-escrows-holdbacks-small-business-sale/ On the figures and conventions described: exclusivity periods, escrow levels and market practice vary by transaction size, sector, jurisdiction and market conditions, and change over time. Everything here is included to help you formulate questions, not as a standard against which to measure your document. Last reviewed and updated: July 25, 2026 · Next review due within 14 days. This guide is general information only. It is not legal advice, does not create a solicitor-client relationship, and must not be relied upon in place of advice from a qualified lawyer in your jurisdiction reviewing your actual document.