What a letter of intent commits you to
Most of an LOI is not binding. The parts that are binding are the ones that matter, and exclusivity is the one that costs you leverage.
A letter of intent is mostly not binding, which leads owners to treat the whole document as a formality. The parts that do bind are the parts that change your position.
Exclusivity is the real term
Sign an LOI and you almost always agree to stop talking to other buyers for a set period. That is the trade: the buyer spends money on diligence, and in exchange he is the only one at the table.
It is reasonable, and it is also the moment your leverage drops. Every other buyer cools off while the clock runs. If diligence turns up something and the buyer asks to adjust the price, you are negotiating alone — which is why the length matters. Sixty days is ordinary. A hundred and twenty with easy extensions is a different agreement.
The rest of what binds
Confidentiality survives whether or not you close. So does who pays their own costs. Sometimes there is a break fee. These are short clauses and they are enforceable while the price and structure above them are not.
Worth settling in the LOI rather than later: what happens to you after closing, what is included in the sale and what you are keeping, and how any holdback or earnout is measured. They are easier to agree when the buyer still has competition in mind.
A Straight Answer
Negotiate the exclusivity period as hard as you negotiate the price. Price in an LOI can move later. The exclusivity window is the thing that decides how much power you have when it does.
BuiltEquity is a sell-side brokerage for trades and field-service companies. Nothing here is legal, tax or accounting advice. Your CPA and your attorney are the authority on your situation.