LOIs: Can "Non-Binding" Be "Binding"?

Letters of intent (LOIs), term sheets, memoranda of understanding—any of these largely interchangeable documents can come into play when an early stage enterprise seeks capital to fund its growth or pursues other commercial transactions. Typically, these documents will be "non-binding" (meaning that their terms will not be legally enforceable by the parties and are merely expressions of the parties' preliminary intent), but they can and often do include certain provisions that are expressly identified as legally binding on the parties, such as confidentiality and exclusivity provisions. All other provisions, including the business terms of the transaction and whether the transaction even occurs, are typically identified as non-binding.