How do you draft a Letter of Intent when buying an aircraft?

Drafting a Letter of Intent (LOI) when buying an aircraft is an important step in the purchasing process. The LOI serves as a formal, preliminary agreement that outlines the basic terms and conditions of the aircraft transaction. While it is not legally binding, it sets the framework for the eventual purchase agreement. Begin with the date, your name, address, and contact information at the top of the page. Address the letter to the seller or their representative. Start with a formal salutation and introduce yourself or your company, including your intentions to purchase the aircraft. Clearly state that you are interested in purchasing the aircraft and that the LOI outlines your preliminary agreement to do so. Specify the proposed purchase price, the currency, and the payment terms. Include information on any earnest money or deposit to be held in escrow. Provide a detailed description of the aircraft, including its make, model, year, and registration number, to ensure there is no ambiguity about which aircraft is the subject of the LOI. Establish a timeframe during which you will conduct inspections, which can include pre-purchase inspections, records reviews, and any other due diligence activities. State that if any issues are found during this period, you may negotiate changes to the purchase terms or, in extreme cases, withdraw from the transaction. Outline any conditions or contingencies you want to include in the agreement, such as the successful completion of the inspection, regulatory compliance, clear title, or obtaining financing. Request that the seller make specific representations regarding the aircraft’s condition, maintenance history, and compliance with applicable regulations. Specify the proposed delivery date and the location of the closing. Detail the responsibilities of each party regarding the transfer of title, possession, and documents. Specify that the seller must transfer clear title and ownership of the aircraft to you upon closing. Include a confidentiality clause that obligates both parties to keep the terms of the LOI and any information exchanged during the negotiation process confidential. Set a reasonable deadline for the seller to accept and sign the LOI. The LOI should be null and void if not accepted within the specified timeframe. Include a space for your signature and the seller’s signature, acknowledging the acceptance of the LOI. Make it clear that the LOI is not legally binding, but rather an agreement to negotiate in good faith. Recommend that both parties seek legal counsel to review the LOI and advise on the negotiation process. Specify the governing law under which the LOI and any subsequent agreements will be interpreted. Include contact information for both parties, including names, addresses, phone numbers, and email addresses. Detail how the LOI should be executed, whether through digital signatures, hard copies, or another agreed-upon method. After drafting the LOI, send it to the seller or their representative for their review and acceptance. Once both parties agree to the terms, you can move forward with more detailed negotiations and the eventual drafting of a binding purchase agreement.