A letter of intent is typically valid for 30 to 90 days, but the real answer depends on what the parties write into the document. No default legal rule sets a universal expiration. The timeline is driven by the type of transaction, the complexity of due diligence, and the specific provisions the parties negotiate. And even after the LOI itself expires, certain clauses inside it can remain enforceable for years.
Typical Timeframes by Transaction Type
In mergers and acquisitions, LOIs commonly run 30 to 90 days. Sellers push for shorter windows, sometimes as little as 15 days, to keep their options open. Buyers want more time for due diligence and often negotiate for 60 days or longer. The exclusivity period inside the LOI often mirrors or slightly exceeds the overall duration. One 2021 LOI filed with the SEC gave the buyer a 90-day exclusivity window, extendable by mutual agreement.1U.S. Securities and Exchange Commission. Verde Bio Holdings, Inc. Letter of Intent
Commercial real estate LOIs land in a similar 30-to-90-day range, with the timeline usually anchored to the buyer’s due diligence period. Extensions tied to additional deposits are common when inspections, environmental reviews, or zoning approvals run long.
Employment offers work on a much tighter clock. A job offer letter or employment LOI typically gives the candidate one to two weeks to accept, though executive-level positions sometimes allow more.
One boundary worth flagging. NCAA athletic commitments are a different animal. The NCAA sets specific signing windows for each sport and division, and a National Letter of Intent binds the athlete to the institution for a full academic year once signed.2NCAA. 2025-26 Division I Signing Dates That’s not the commercial LOI most people are asking about.
What Actually Ends an LOI
Three mechanisms usually control when an LOI expires: an explicit deadline in the document, the signing of a definitive agreement, or the success or failure of conditions the parties set.
An Explicit Expiration Date
Well-drafted LOIs include a specific expiration date or a defined period, for example “60 days from execution.” Once that date passes, the LOI lapses on its own. This is the simplest and most common approach. If your LOI has no expiration language at all, you’re in murkier territory, and that ambiguity by itself is a reason to have a lawyer review the document before signing.
Signing the Definitive Agreement
The purpose of an LOI is to serve as a bridge to a final, comprehensive contract. Once both sides execute that definitive agreement, the LOI has done its job and terminates. The definitive agreement supersedes all prior understandings between the parties, written or oral.3Justia. Business Contracts – Definitive Agreement Contract Clauses In practice, the LOI’s proposed price, structure, and timeline give way to whatever the final contract says, even if the terms shifted during negotiations.
Conditions and Milestones
Many LOIs tie continued effectiveness to specific conditions. An LOI might expire automatically if the buyer can’t secure financing within 45 days, if due diligence turns up a material problem, or if regulatory approval isn’t obtained by a set date. Complex transactions tend to carry longer LOI durations because there’s more to investigate. A straightforward asset purchase might need 30 days; a cross-border acquisition with regulatory hurdles might need 90 or more.
Extending an LOI or Ending It Early
If negotiations are progressing but you need more time, extending an LOI requires a written amendment signed by all parties. One SEC-filed transaction shows how this works: the original LOI set a deadline, and the parties later executed a formal “Amendment No. 1” that pushed the timeline forward while preserving the original terms.4Securities and Exchange Commission. Amendment No. 1 to Letter of Intent In real estate deals, extensions sometimes require an additional deposit to compensate the seller for keeping the property off the market longer. A verbal agreement to “keep talking” does not extend an LOI’s expiration date.
An LOI can also end before its expiration in several ways. Mutual termination, where both parties sign a written agreement ending the LOI and releasing each other from further obligations, is the cleanest.5U.S. Securities and Exchange Commission. Mutual Termination Agreement Some LOIs include unilateral termination rights, letting one party walk away if specific triggers occur, such as a missed deadline for delivering financial records or a failed regulatory approval. A material breach of any binding provision also gives the non-breaching party grounds to terminate.
Some LOIs include break-up or termination fees to compensate a party that invested significant time and resources if the other side walks away. These fees generally range from 1% to 3% of the deal’s value.6Houlihan Lokey. 2024 Transaction Termination Fee Study
Which Provisions Bind You While the LOI Is Alive
An LOI is mostly non-binding, meaning neither side is legally obligated to close the deal. But certain provisions are carved out as binding the moment you sign, and breaching them carries real consequences even if the deal never closes.
The two most common binding provisions are confidentiality and exclusivity clauses. A confidentiality clause protects the sensitive financial and operational information shared during due diligence. An exclusivity clause, sometimes called a no-shop clause, prevents one or both parties from negotiating with competitors for a set period.1U.S. Securities and Exchange Commission. Verde Bio Holdings, Inc. Letter of Intent Violating either during the LOI period can expose you to a lawsuit for damages regardless of whether the larger transaction falls apart.
Other provisions frequently made binding include governing law clauses, dispute resolution mechanisms, and the allocation of transaction costs. A well-drafted LOI clearly labels which sections are binding and which are not. When it doesn’t, courts look at the parties’ conduct and the language of the document to figure out what was intended, and that analysis rarely goes the way either side expects.
Which Provisions Survive After Expiration
When an LOI expires or terminates, the non-binding terms vanish. Binding provisions with explicit survival language keep going. Confidentiality obligations are the most common example. In the Verde Bio Holdings LOI, the confidentiality clause survived for three years beyond the LOI’s term, and the seller retained the right to demand the return or destruction of all confidential materials at any time.1U.S. Securities and Exchange Commission. Verde Bio Holdings, Inc. Letter of Intent Survival periods of one to three years are standard for confidentiality obligations, though trade secrets may be protected indefinitely.
Non-solicitation clauses also frequently survive. These restrictions prevent one party from poaching the other’s employees or contractors for a defined period after the LOI ends. One SEC-filed agreement specified a 12-month non-solicitation period following termination, with explicit language stating that the obligations would survive regardless of how or why the agreement ended.7U.S. Securities and Exchange Commission. Non-Solicitation Agreement – Section: Survival
Read every LOI carefully for survival clauses before you sign. The deal may die in 60 days, but a confidentiality or non-solicitation obligation you overlooked could follow you for years.
When a “Non-Binding” LOI Can Still Be Enforced
Labeling your LOI non-binding does not guarantee a court will treat it that way. This is the risk most people underestimate. Courts in New York, Delaware, and other commercially important states recognize two categories of preliminary agreements that can override a non-binding label.
A Type I preliminary agreement arises when the parties have reached agreement on all material terms and intend to be bound, even though they plan to draft a more formal document later. Courts treat that preliminary agreement as a fully enforceable contract. If your LOI nails down price, payment terms, closing conditions, and every other significant term, a court may conclude you already have a deal regardless of what the header says.8Texas Law Review. Designing and Enforcing Preliminary Agreements
A Type II preliminary agreement is less absolute but still carries teeth. It arises when the parties have agreed on major terms but acknowledge that open issues remain. Rather than binding both sides to close, a Type II agreement creates a mutual obligation to continue negotiating in good faith within the framework the LOI established. Walking away for a pretextual reason, or stalling to gain leverage, can expose the departing party to liability.8Texas Law Review. Designing and Enforcing Preliminary Agreements
Courts weigh whether the document expressly reserves the right not to be bound, whether material terms are still open, whether the parties have already started performing, industry custom, and how tentative or definitive the language reads. If you want your LOI to stay non-binding, include explicit language reserving the right not to be bound until a definitive agreement is signed. Vague or missing disclaimers leave the door open for a court to find otherwise.