M&A Glossary

An Expenses Provision is a section in a letter of intent or memorandum of understanding that sets out the liability of each party with respect to the expenses associated with due diligence and negotiating the transaction documents in the event that a transaction does not close. Typically the Buyer wishes for the Seller to pay a fixed portion of the expenses. The Expenses Provision may also provide that each party is responsible for its own expenses, costs, and fees associated with due diligence and negotiating the transaction documents.