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The Formal Letter of Intent is a crucial preliminary document in Austrian business practice, commonly used when parties are preparing to enter into significant business transactions or relationships. It serves as a formal expression of the parties' intentions while negotiations progress toward a definitive agreement. Under Austrian law, while most provisions are typically non-binding, certain elements like confidentiality and exclusivity can be made explicitly binding. The document helps structure negotiations, outline key terms, and establish timelines, while providing a framework that complies with Austrian legal requirements, particularly those under the ABGB and UGB. It's especially valuable in complex transactions where detailed due diligence and extensive negotiations are anticipated, offering parties a clear roadmap while maintaining flexibility before final commitments are made.

1. Letter Header: Formal letter heading including date, recipient's full details, and reference number if applicable

2. Subject Line: Clear identification of the proposed transaction or relationship

3. Opening Paragraph: Introduction of the sender and brief statement of intent

4. Transaction Overview: Brief description of the proposed transaction or business relationship

5. Key Terms: Main commercial terms and conditions being proposed

6. Timeline: Proposed schedule for negotiations and completion of the final agreement

7. Confidentiality: Basic confidentiality obligations regarding the proposed transaction

8. Non-Binding Nature: Clear statement about which provisions are non-binding vs. binding

9. Exclusivity: Any exclusivity period for negotiations if applicable

10. Costs: Statement regarding who bears the costs of negotiations and due diligence

11. Closing: Formal closing paragraph with call to action

12. Signature Block: Space for signatures of authorized representatives