The Letter of Intent (LOI) is a document that serves as an agreement between two parties before engaging in a formal contract. It outlines the terms and conditions of the proposed contract and serves as a binding agreement between the parties. The LOI is a vital part of the dental practice, as it helps to ensure that patients receive the highest quality of care possible. It also helps to protect the dental practice from liability if something goes wrong during treatment. Contact Anaheim Dental Attorney if you want to frame your LOI agreement for your dental practice.
What should you include in your dental practice LOI?
- Deposit or Earnest money
Deposit or earnest money is typically used in real estate transactions as a way for the buyer to show that they are serious about purchasing the property. In a dental practice acquisition, the deposit or earnest money may show the seller that the buyer is serious about acquiring the practice. The deposit may also be used to cover due diligence costs, such as appraisals and inspections.
- Purchase price
The purchase price of a dental practice is essential, but there are other factors to consider when buying a practice. The price will affect the amount of money you need to borrow and the monthly payments you will make, so it is vital to consider the price carefully. However, the price is not the only thing to consider when buying a practice. You also need to consider the location, type, and size of the practice, along with equipment, staff, and patient base.
- Assets
The role of assets in dental practice is to provide the dental team with the necessary tools to perform their duties. This includes both physical and financial assets. Physical assets may include dental equipment, supplies, and office furniture. Financial assets may consist of cash, investments, and accounts receivable.
- Restrictive Covenants
Restrictive covenants are typically included in a Letter of Agreement (LOA) between a dental practice and an employee. The purpose of these covenants is to protect the dental practice’s business interests by preventing the employee from engaging in competitive activities that would harm the practice.
The most common type of restrictive covenant is a non-compete clause, which prohibits the employee from working for a competitor of the dental practice within a particular geographic area for a specified period of time. Other restrictive covenants may include non-solicitation clauses, which prevent the employee from soliciting the practice’s patients or employees, and non-disclosure clauses, which restrict the employee from disclosing the practice’s confidential information.
The enforceability of restrictive covenants varies from state to state, and courts will typically only enforce them if they are deemed to be reasonable in scope and duration.
