The Letter of Intent to Supply Goods is a crucial preliminary document in Australian commercial transactions, used when parties wish to formalize their intentions before entering into a detailed supply agreement. It serves as a stepping stone in complex supply arrangements, providing a structured framework for negotiations while allowing parties to conduct due diligence and finalize commercial terms. This document typically precedes a formal supply agreement and includes essential elements such as product specifications, indicative pricing, proposed timelines, and any conditions precedent. While primarily non-binding, it often contains certain binding provisions such as confidentiality and exclusivity obligations. The document must consider Australian legal requirements, including the Competition and Consumer Act 2010 (Cth) and relevant state-based legislation, making it a valuable tool in commercial negotiations across various industries.
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1. Date: The date of the letter
2. Recipient Details: Full name and address of the recipient (potential supplier)
3. Subject Line: Clear indication that this is a Letter of Intent for Supply of Goods
4. Introduction: Brief introduction identifying the parties and their roles
5. Background: Context of the proposed supply arrangement and any relevant history
6. Intent Statement: Clear statement of intention to enter into a supply agreement
7. Key Commercial Terms: Overview of principal terms including goods description, quantity, and indicative pricing
8. Timeline: Proposed timeline for negotiation and execution of formal agreement
9. Non-Binding Nature: Statement clarifying which provisions are binding and non-binding
10. Confidentiality: Basic confidentiality obligations regarding the proposed arrangement
11. Exclusivity Period: If applicable, period during which parties agree to negotiate exclusively
12. Next Steps: Clear outline of the next steps in the process
13. Signature Block: Space for signatures of authorized representatives
1. Conditions Precedent: Include when certain conditions must be met before proceeding with formal agreement
2. Due Diligence: Include when specific due diligence requirements need to be outlined
3. Cost Allocation: Include when parties need to specify who bears costs during the negotiation phase
4. Governing Law: Include when dealing with interstate or international parties
5. Termination Rights: Include when specific termination rights during the negotiation phase need to be outlined
6. Dispute Resolution: Include when specific dispute resolution mechanisms for the negotiation phase are required
7. Initial Payment Terms: Include when preliminary payment arrangements need to be specified
1. Schedule 1 - Proposed Commercial Terms: Detailed outline of key commercial terms including pricing, volumes, and delivery requirements
2. Schedule 2 - Product Specifications: Technical specifications or description of the goods to be supplied
3. Schedule 3 - Timeline and Milestones: Detailed timeline for negotiation, due diligence, and execution of formal agreement
4. Appendix A - Form of Confidentiality Agreement: If required, draft confidentiality agreement to be executed alongside the LOI
Relevant legal definitions
Clauses
Relevant Industries
Manufacturing
Retail
Wholesale Trade
Agriculture
Mining
Construction
Automotive
Electronics
Food and Beverage
Pharmaceuticals
Chemical Industry
Consumer Goods
Industrial Equipment
Textiles
Energy and Resources
Relevant Teams
Legal
Procurement
Supply Chain
Commercial
Operations
Business Development
Sourcing
Vendor Management
Contract Administration
Sales
Risk Management
Relevant Roles
Procurement Manager
Supply Chain Director
Commercial Manager
Legal Counsel
Contract Manager
Business Development Manager
Operations Manager
Purchasing Officer
Category Manager
Chief Operating Officer
Sourcing Manager
Vendor Manager
General Manager
Sales Director
Commercial Director
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