The Letter of Intent for Distributorship serves as a crucial preliminary step in establishing distribution relationships in Belgium, providing a structured framework for negotiations while maintaining legal compliance with Belgian commercial law. This document is typically used when parties have agreed in principle to enter into a distribution relationship but need to formalize their intentions and establish ground rules for negotiating the definitive agreement. It includes essential elements such as the proposed territory, product range, and key commercial terms, while incorporating specific Belgian legal requirements regarding pre-contractual obligations and language laws. The document balances the need to outline serious business intentions while maintaining flexibility for final negotiations, with certain provisions (such as confidentiality and exclusivity during negotiations) being legally binding while others remain subject to final agreement.
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1. Date and Parties: Identification of the parties, including full legal names, addresses, and company registration details
2. Background/Introduction: Brief context of the proposed distributorship relationship and purpose of the letter
3. Definitions: Key terms used in the letter that require precise definition
4. Proposed Business Relationship: Overview of the intended distribution arrangement, including territory and products
5. Key Commercial Terms: Outline of essential business terms such as exclusivity, target markets, and general pricing principles
6. Negotiation Period: Timeframe for negotiating the final agreement and any exclusivity in negotiations
7. Confidentiality: Obligations regarding confidential information exchanged during negotiations
8. Non-Binding Nature: Clear statement of which provisions are non-binding vs. binding (typically confidentiality, exclusivity, and governing law are binding)
9. Next Steps: Process for moving forward with negotiations and timeline for definitive agreement
10. Governing Law: Specification of Belgian law as governing law and jurisdiction
11. Signatures: Execution blocks for authorized representatives of both parties
1. Break Fee: Include when parties want to specify compensation if negotiations are terminated without cause
2. Due Diligence: Add when preliminary due diligence requirements need to be outlined
3. Exclusivity Period: Include when parties agree not to negotiate with other potential partners during the negotiation period
4. Costs and Expenses: Add when parties want to clarify responsibility for costs during the negotiation phase
5. Language Requirements: Include when the final agreement needs to comply with Belgian language laws depending on region
6. Initial Investment: Add when preliminary commitments regarding investment or infrastructure are necessary
1. Appendix A - Product List: Preliminary list of products intended to be covered by the distribution agreement
2. Appendix B - Territory Map: Visual representation of the proposed territory
3. Appendix C - Timeline: Detailed timeline for negotiations and key milestones
4. Appendix D - Initial Terms Sheet: Summary of key commercial terms to be included in the final agreement
5. Appendix E - Confidentiality Terms: Detailed confidentiality provisions if more extensive than in main letter
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