A letter of intent is meant to be a roadmap, not a finished contract, but the choices made at that stage tend to harden quickly once diligence begins. Buyers and sellers who treat the LOI as a formality often find themselves negotiating from a weaker position later, simply because a term was left vague or assumed rather than addressed head on. Below are five areas that consistently cause friction in middle-market transactions, and that are worth resolving, or at least framing clearly, before the LOI is signed.

1. Earnout Mechanics, Not Just the Earnout Amount

An earnout can bridge a ...

In the recently published opinion in Betanco v. Living Spaces Furniture, LLC, the First District Court of Appeal confirmed that a last-mile delivery driver can qualify as a “transportation worker” exempt from the Federal Arbitration Act even where the sale was retail and the delivery never left California. The First District’s inquiry turned on whether the driver remained part of the continuous movement of goods in interstate commerce from origin through delivery. Because the furniture never left that stream, even after a brief pause at a distribution center, his ...