What is a letter of intent (LOI) under Dutch law?

Dutch term: Intentieovereenkomst / Letter of Intent | Legal basis: Case law (Plas/Valburg) + 6:248 BW

A letter of intent (LOI or intentieovereenkomst) under Dutch law is a pre-contractual document in which parties record their intention to negotiate towards a definitive agreement and set out the key commercial terms, conditions and timeline. LOIs can range from non-binding expressions of interest to partially binding preliminary agreements.

Under Dutch law, LOIs carry more legal weight than in many common-law jurisdictions. The Plas/Valburg doctrine on pre-contractual good faith means that a detailed LOI can create legitimate expectations that a contract will follow, making it difficult or costly to walk away without justification. Exclusivity clauses, confidentiality obligations and cost-sharing provisions in an LOI are typically binding even if the rest is stated to be non-binding.

Why it matters for international businesses

For international businesses negotiating a Dutch deal, the LOI should be drafted with full awareness of the Dutch pre-contractual liability rules. What the parties intend to be 'non-binding' may not always be treated as such by a Dutch court.