Managing multiple interested parties at once

What’s actually allowed before exclusivity is granted

Treadstonelaw.ca’s answer to this exact question is unambiguous: “generally, yes, as long as none of the LOIs you’ve signed actually contains a binding exclusivity or no-shop commitment.” Its framing treats this as ordinary practice, not a grey area: “signing preliminary, non-binding documents with more than one interested party isn’t unusual, and there’s nothing inherently wrong with keeping multiple conversations open until you’ve decided who to move forward with, provided you haven’t already promised otherwise.” The operative condition is entirely about what earlier documents say, not about how many conversations are open at once.

The trap — an earlier LOI you forgot had exclusivity in it

The main risk treadstonelaw.ca flags is not the second conversation itself: it is the possibility of “accidentally breach[ing] an earlier LOI’s exclusivity clause while negotiating with a second buyer.” The guidance is to check every prior document for exclusivity language before signing an additional one — not just the most recent LOI, since a term sheet signed months earlier and never formally terminated can still carry a live exclusivity obligation. A seller who assumes an old LOI has lapsed simply because talks went quiet is exactly the pattern this warning is aimed at.

What exclusivity actually shuts down once it exists

Once one party is granted exclusivity, the terms are typically broad. Treadstonelaw.ca’s description of a standard exclusivity clause covers “soliciting, encouraging, or inviting offers from other prospective buyers” and “negotiating with, or providing due diligence materials to, another prospective buyer” — and the rationale given is direct: “the whole point of an exclusivity clause is to give the buyer a defined window to invest in due diligence and negotiation without the seller simultaneously running a competing sale process — and that protection would be meaningless if it weren’t enforceable on its own terms.” That reach is why the multiple-buyer question has a clean before-and-after: freely permitted before exclusivity, sharply restricted after.

There is a practical variant of this question worth separating out: a seller can be approached by more than one buyer at overlapping but different stages — one already past a signed, expiring LOI and into diligence, another just introducing themselves. The exclusivity analysis above answers whether the second conversation is legally open; it does not answer whether it is wise to start it. Deavo’s own account of Canadian sale timelines is a useful reference point here: financing, it notes, is “often the stage that adds the most unpredictability,” which means a buyer running slightly behind schedule on financing is not automatically a buyer in trouble. Restarting a cold conversation with a new party while an existing buyer is deep into diligence, close to a definitive agreement, and simply running behind on a normal, unpredictable stage of the process can cost more in goodwill and momentum with the party most likely to actually close than it gains in optionality. The paper question and the strategic question are related but not identical, and both deserve a separate answer before a second LOI goes out.

Running parallel conversations without promising the same thing twice

Beyond the paper question, keeping two live conversations open well is partly a matter of not letting either party believe they have something they don’t. Verbal enthusiasm is easy to overstate in the moment, and a buyer who believes — even informally — that they have been promised priority can treat a later decision to proceed with someone else as bad faith, whether or not any document actually said so. The paper protects the seller legally; being precise about status protects the relationship, which matters if the preferred buyer’s financing later falls through and the seller needs to go back to the other party. See handling a buyer who keeps asking for more time for how a stalling first-choice buyer changes the calculus on whether to keep a second conversation genuinely warm.

When it’s time to pick one

There is no fixed rule for when parallel conversations should narrow to a single exclusive negotiation — it typically happens once one party’s offer is credible enough, and their financing and diligence progress real enough, that the cost of losing momentum with them outweighs the value of keeping other options open. See choosing between a broad auction and a quiet approach for how the number of parties in play at the outset shapes when that point is reached, and managing confidentiality during a live process for why more than one active buyer usually means more caution about how much any one of them sees before a choice is made.

Common questions

Does an NDA by itself grant any kind of exclusivity?

No — a confidentiality agreement governs how a recipient may use and protect information, not whether the seller can talk to other buyers. Exclusivity is a separate, distinct commitment that must appear explicitly in an LOI or term sheet to have any effect.

What if two LOIs are signed and both later claim exclusivity was implied?

This is exactly the scenario the paper trail is meant to prevent. A written LOI that does not contain an exclusivity clause gives no one grounds to claim one was implied — which is the practical argument for having a lawyer review each LOI’s exact language before signing, rather than relying on a shared understanding of what was “obviously” meant.

Is it disclosed to buyers that other conversations are happening?

There is no legal requirement to disclose it before exclusivity is granted, and sellers vary in practice. Some disclose openly to create competitive tension; others keep conversations separate until one is chosen. Either approach is workable as long as no document promises otherwise to any one party.

Can a buyer request exclusivity before signing an LOI at all?

It happens, particularly where a buyer wants to spend real money on diligence before committing to a price. A seller can agree to a short, standalone exclusivity arrangement ahead of a full LOI, but the same rule applies: once signed, it closes off other conversations for its duration exactly as an LOI’s exclusivity clause would, so it deserves the same scrutiny before signing rather than being treated as a low-stakes formality.