A dental practice letter of intent should identify the proposed purchase, its economic assumptions, the conditions still to be satisfied, and any commitments intended to apply immediately. Before signing, give your acquisition attorney a written issue list covering those points. An attractive price and target closing date are not enough to define the deal.
The LOI is an early negotiation document, but its legal effect depends on its wording, related agreements, circumstances, and governing law. Have counsel review it before submission or acceptance, including a form supplied by the seller or broker.
Mark the proposed commitments before discussing price
Ask the attorney to identify each provision as intended to be binding, intended to remain nonbinding, or unresolved. Purchase economics may be preliminary while confidentiality, exclusivity, expenses, or dispute provisions create immediate obligations. Do not assume a heading saying “nonbinding” answers every question.
In *SIGA Technologies v. PharmAthene*, the Delaware Supreme Court upheld an express contractual obligation to negotiate in good faith in accordance with a term sheet. That case is a specific example of why preliminary deal documents and related agreements need to be read together; it is not a nationwide rule that every LOI creates that duty. Delaware Supreme Court's SIGA decision
Have counsel explain what happens if you change your proposed terms, stop negotiations, miss a deadline, or decline to sign the definitive agreement. Ask who would owe which costs and which provisions survive termination. Resolve those questions before treating the LOI as permission to investigate without consequences.
Describe the purchase in terms both sides can check
Identify the proposed buyer and every seller whose property or ownership interest matters. If your buying entity has not been formed, ask counsel how to handle that fact and any proposed personal obligations.
Then establish the proposed structure using the asset-versus-stock purchase discussion. The LOI should carry the selected business assumptions forward without pretending the final transfer documents already exist.
Prepare a short included-and-excluded schedule for attorney review:
- Clinical and office equipment, with financed or leased items flagged.
- Supplies and the proposed inventory condition at transfer.
- Practice name, website, domain, phone number, and other identified business assets.
- Receivables, cash, deposits, prepaid expenses, and patient credits.
- Real estate, if any, and its separate owner or transaction.
- Obligations the buyer proposes to assume or leave with the seller.
Avoid an unexplained phrase such as “all assets necessary to operate.” If the main phone number belongs to a separate entity, the issue deserves an identified solution rather than an assumption that it will follow the equipment.
Attach assumptions to the headline price
State what the proposed amount includes and what could change it. Ask the CPA and attorney to coordinate questions about cash at closing, seller financing, contingent consideration, deposits, allocation, and adjustments. Those mechanisms should be visible before either party believes the price is settled.
For example, a fictional buyer proposes a price assuming the seller retains old receivables, delivers identified equipment without outstanding financing, and resolves existing patient credits through an agreed arrangement. The seller instead expects the buyer to assume equipment payments and patient-credit obligations. The same stated price now describes different economics.
The useful LOI question is not merely whether the seller accepts the number. It is whether both parties accept the same assumptions behind it. Record disputed items and the evidence needed to resolve them.
If a deposit is proposed, ask counsel to address its holder, release conditions, refund conditions, deadlines, and dispute process. Do not transfer funds based on a verbal assurance that the deposit is refundable.
Negotiate a usable diligence window
The LOI should set expectations about access: which documents will be available, when, to whom, through which controlled channel, and how follow-up requests will be handled. Define the event that starts the review period. A deadline tied to signature can consume review time before important records arrive.
Use the practice acquisition due diligence checklist to determine the investigation's scope. The LOI issue list should focus on access and process, including site visits, professional inspections, interviews, and the treatment of missing information.
Agree on who may approach staff, the landlord, payers, and vendors, and at what stage. Have counsel establish confidentiality, privacy, and permitted-use controls before sensitive records are shared. A buyer's desire to inspect does not by itself establish an unrestricted right to patient data.
The ADA's transition guidance identifies records access, receivables, lease terms, equipment ownership, and continued-care responsibilities as matters requiring attention in sale agreements. Use those issues to shape the access your advisers need. ADA practice-transition review guidance
Give financing and premises their own conditions
Ask your lender what it needs to evaluate this specific acquisition and what remains preliminary. The proposed LOI conditions should reflect the actual funding process, required borrower contribution, and any unresolved seller-financing arrangement. A favorable introductory call is not the same evidence as a usable financing commitment.
For the premises, distinguish landlord consent to assignment from agreement on a replacement lease. Ask counsel to specify the required outcome, relevant economic assumptions, acceptable timing, and what happens if the landlord declines or changes terms materially.
Identify other deal dependencies with the responsible advisers, including professional permissions, payer arrangements, essential contracts, and seller transition work. If continued seller work matters, record its proposed duration, duties, availability, and compensation for later agreement. Avoid relying on “seller will assist as needed.”
Connect exclusivity to progress and a clear end
Exclusivity can restrict the seller's discussions with other buyers while you incur investigation costs. Its actual scope comes from the document. Ask what conduct is restricted, when the period begins, when it ends, how extensions occur, and whether delayed access affects the timeline.
Keep acquisition exclusivity separate from your own broker engagement. The buyer broker review guide addresses representation and broker fees; those commitments may continue even if the purchase discussions stop.
Bring this issue sheet to the final LOI review:
| Issue | Proposed business answer | Question still requiring resolution |
|---|---|---|
| Deal scope | Identified assets or ownership interests | Which exclusions or obligations remain disputed? |
| Price | Amount plus stated assumptions | What changes the payment or adjustment? |
| Diligence | Defined access and review period | What starts the clock, and what if records are late? |
| Conditions | Financing, lease, and other dependencies | Who determines satisfaction or waiver? |
| Exclusivity | Defined conduct and end date | What ends or extends the restriction? |
| Binding terms | Counsel's marked provisions | What obligations survive a failed purchase? |
Retain the signed version, attachments, deadlines, and open issues together. When definitive agreements arrive, compare them against this record and identify every negotiated change before signature.
