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A Letter Of Intent Distribution Agreement is commonly used in Austrian business practice as a stepping stone toward establishing a formal distribution relationship. This document is particularly relevant when parties have progressed beyond initial discussions but require a structured framework before committing to a full distribution agreement. It typically comes into play when a manufacturer seeks to expand its market presence through a distributor, or when significant distribution rights are being negotiated. Under Austrian law, while the LOI is generally non-binding regarding the main commercial terms, certain provisions (such as confidentiality and exclusivity during negotiations) can create binding obligations. The document serves to outline key commercial terms, establish negotiation parameters, and demonstrate serious intent while protecting both parties during the negotiation phase. It's especially important in cross-border distribution arrangements where Austrian law intersects with international trade considerations.

1. Opening Statement: Formal letter opening identifying the parties and date

2. Purpose: Clear statement that this is a Letter of Intent regarding a potential distribution agreement

3. Background: Brief context of the discussions and relationship between parties

4. Proposed Key Terms: Outline of main distribution terms including territory, products, and exclusivity status

5. Timeline: Proposed schedule for negotiation and execution of the final agreement

6. Confidentiality: Statement regarding confidentiality of discussions and shared information

7. Non-Binding Nature: Clear statement about which provisions are non-binding vs. binding

8. Duration: Validity period of the Letter of Intent

9. Closing: Signature blocks and formal letter closing