Letter of Intent Mexico (Acuerdo de Intención de Negocio)

A Letter of Intent Mexico (Acuerdo de Intención de Negocio or Carta de Intención) is a preliminary written document in which two or more parties record the key terms, mutual understanding, and intent to negotiate and execute a definitive commercial agreement — without immediately creating fully binding contractual obligations for the substantive transaction itself. The Letter of Intent Mexico is governed by the Código de Comercio Article 75 (which classifies commercial negotiations and preliminary commercial acts as actos de comercio) and by the Código Civil Federal (CCF) Articles 1792 through 1796, which establish the general principles of contract formation, pre-contractual obligation (obligación precontractual), and good faith (buena fe) in Mexican law.

Under Mexican commercial and civil law, a Letter of Intent (LOI) occupies a distinct legal position — it is generally not a binding contract for the main transaction it describes, but it is a binding agreement with respect to any clauses that are expressly identified as legally binding within the document itself. The Suprema Corte de Justicia de la Nación (SCJN) and the Tribunales Colegiados de Circuito have held, through jurisprudencia and tesis aisladas, that parties who execute a Letter of Intent acknowledging their mutual intention to negotiate in good faith create a pre-contractual obligation (obligación precontractual) under CCF Article 1796 — the party who abandons negotiations in bad faith without justified cause may be liable for culpa in contrahendo (pre-contractual liability) for the losses caused to the other party by the interrupted negotiation.

The Código de Comercio Article 75 classifies all operations between merchants (comerciantes) in the course of their commercial activities as actos de comercio, including preliminary commercial negotiations and pre-contractual documents. This means that a Letter of Intent signed between two Mexican merchants in the context of a commercial transaction is subject to the commercial law regime of the Código de Comercio rather than purely civil rules — including the presumption of good faith in commercial dealings established by Article 4 of the Código de Comercio.

The LOI is widely used in Mexico for mergers and acquisitions (M&A) transactions, real estate development projects, commercial joint ventures, franchise negotiations, and major procurement contracts. In the Mexican M&A market, the LOI (also called Carta de Intención or Term Sheet when presented in tabular format) is typically the first formal document signed between a buyer and seller after preliminary discussions — it records the proposed transaction structure, indicative valuation, due diligence timeline, exclusivity period, and the conditions precedent to signing a definitive Share Purchase Agreement (SPA) or Asset Purchase Agreement (APA). The Asociación Mexicana de Capital Privado (AMEXCAP) treats the LOI as a standard pre-transaction document in Mexican private equity and venture capital deals.

For real estate transactions under the Ley General de Asentamientos Humanos, Ordenamiento Territorial y Desarrollo Urbano and the Código Civil Federal for real property, a preliminary LOI records the proposed purchase price, payment structure, due diligence conditions, and timeline before the formal promesa de compraventa (preliminary sale agreement) and escritura pública ante Notario are executed. The LOI's confidentiality and exclusivity clauses are often the most commercially significant binding provisions in real estate transactions.

A Letter of Intent Mexico is required whenever parties to a prospective commercial transaction wish to document their mutual understanding and preliminary terms before negotiating and executing a definitive binding agreement — particularly when the transaction involves multiple conditions, due diligence requirements, or complex commercial terms that require time to finalise.

The Acuerdo de Intención de Negocio is needed at the commencement of an M&A transaction in Mexico — before the buyer conducts financial, legal, and tax due diligence on the target company. The LOI records the proposed enterprise value, transaction structure (share deal versus asset deal), target closing date, exclusivity period (during which the seller agrees not to negotiate with other buyers), and the conditions that must be satisfied before a definitive agreement is signed. In Mexican private equity transactions under AMEXCAP protocols, a signed LOI is a prerequisite to opening the data room.

The document is needed when a foreign investor wishes to establish a joint venture (empresa conjunta) or strategic alliance with a Mexican company — the LOI records the proposed ownership structure, governance arrangements, capital contributions, and business scope before the definitive joint venture agreement and corporate formation documents are prepared and executed before a Notario Público.

A Letter of Intent is needed in real estate development transactions — when a developer agrees in principle to purchase land (terreno) or commercial property from a seller, the LOI records the agreed price, payment conditions, due diligence period, environmental assessment requirements, and the conditions under which the formal promesa de compraventa will be executed. The LOI's exclusivity clause prevents the seller from selling to a third party during the negotiation period.

The agreement is needed when two companies negotiate a major long-term supply or distribution agreement — the LOI establishes the framework commercial terms, minimum volume commitments, pricing mechanism, and exclusivity arrangements before the detailed distribution contract or supply agreement is drafted and reviewed by legal counsel.

Under Código de Comercio art. 75 and CCF art. 1792, a written Letter of Intent is best practice for any significant commercial negotiation — it reduces misunderstanding, establishes the parties' mutual intent, and creates pre-contractual obligations of good faith that provide legal protection if one party later abandons the negotiation without justified cause.

A well-structured Letter of Intent Mexico under the Código de Comercio Article 75 and Código Civil Federal Articles 1792–1796 must contain the following essential elements to serve its commercial purpose and provide pre-contractual legal protection:

Party Identification: Full legal name, RFC, Registro Público de Comercio folio, domicilio fiscal, and legal representative details for each party. The LOI must identify which party is the proposed buyer, seller, investor, or partner in the contemplated transaction, and confirm each representative's authority to execute the document under the applicable corporate authorisation.

Description of the Proposed Transaction: A clear, sufficiently detailed description of the commercial transaction the parties intend to negotiate — including the type of transaction (e.g., compraventa de acciones, aportación de capital, celebración de contrato de distribución), the subject matter (empresa objetivo, activos, territorio de distribución), and the proposed commercial structure. The description establishes the context for interpreting all other LOI provisions.

Principal Commercial Terms: The key commercial parameters of the proposed transaction — indicative price or valuation (valoración indicativa), payment structure and currency (MXN or USD), proposed closing date (fecha estimada de cierre), and any major conditions precedent (condiciones suspensivas) including regulatory approvals from the Comisión Federal de Competencia Económica (COFECE) for transactions meeting merger notification thresholds under the Ley Federal de Competencia Económica Articles 86–91.

Binding Versus Non-Binding Clauses: A clear statement identifying which provisions of the LOI are legally binding (vinculantes) and which are non-binding expressions of intent (no vinculantes). Standard practice in Mexico is for the principal commercial terms to be non-binding, while confidentiality, exclusivity, governing law, and dispute resolution provisions are expressly declared binding. This distinction is critical to avoid inadvertent creation of a binding agreement for the entire transaction.

Exclusivity Period: A binding exclusivity clause (cláusula de exclusividad) during which the party offering the transaction (typically the seller or the company seeking investment) agrees not to negotiate, solicit, or enter into discussions with any third party regarding the same transaction. The exclusivity period (período de exclusividad) should be time-limited — typically 30, 60, or 90 days — with a process for extension by mutual written agreement.

Due Diligence Framework: The scope, timeline, and access arrangements for due diligence (revisión legal, contable, fiscal, y técnica) — specifying which documents and systems the investigating party will access, the deadline for completion of due diligence, and the parties' obligations to provide access and information in good faith.

Conditions Precedent: The material conditions (condiciones suspensivas) that must be satisfied before the parties are obligated to execute the definitive agreement — including satisfactory due diligence results, board or shareholder approvals, COFECE merger clearance if required, regulatory licences, third-party consents, and financing commitments.

Confidentiality: A binding confidentiality clause covering all information exchanged during the LOI negotiation phase and due diligence, consistent with LFPPI Articles 82–84. The confidentiality obligation should survive termination of the LOI for a defined period regardless of whether the transaction is completed.

Governing Law and Jurisdiction: The laws of the Estados Unidos Mexicanos — Código de Comercio and CCF — as the governing law. Designation of the Juzgados de Distrito en Materia Civil Federal of the agreed city (typically Ciudad de México, Monterrey, or Guadalajara) as the competent jurisdiction for any disputes arising from the binding provisions of the LOI.

Forms-legal.com provides this Letter of Intent Mexico template as a practical starting point for commercial negotiations. LOIs involving transactions subject to COFECE merger control review, real estate under notarial requirements, or foreign investment under the Ley de Inversión Extranjera should be reviewed by a Licenciado en Derecho specialised in derecho corporativo or fusiones y adquisiciones before execution.