Corporate attorneys and clients will be relieved to learn of a federal jury verdict and judge’s decision that, together, limit the potential reach of the “duty to negotiate in good faith” that can arise during the early phase of a potential transaction from just a term sheet or letter of intent (LOI).

In sum, parties can now have more confidence that “nonbinding” actually means nonbinding, and even if such a “duty” exists in an LOI, that the damages will be limited, discouraging counterparties from weaponizing this claim to get a windfall.

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