By DANA ULRICH
Dickinson Wright 

LOI drift is one of the more underappreciated risks in healthcare transactions, and one of the more avoidable ones. It happens when the terms agreed to in a letter of intent, such as a co-branding commitment or a governance right, simply don’t make it into the definitive agreement. Whether by oversight or negotiating attrition, the result is the same: the deal you thought you closed isn’t the deal that governs the relationship. For healthcare organizations entering complex affiliations, joint ventures, or MSO arrangements, that gap can be costly.

 Apex Health, Inc. v. Atrium Health, Inc., 2026 NCBC 10 (N.C. Super. Ct. Feb. 11, 2026) is a notable example of the procedural consequences of LOI drift. Apex and Atrium executed an LOI for a Medicare Advantage plan that referenced marketing and co-branding, but when the definitive agreement was executed, those concepts had vanished. When the joint venture faltered, and Apex faced losses approaching $62 million, Apex sought to amend its complaint to add a UDTPA claim, attempting to resurrect the LOI’s business understandings as a basis for contractual interpretation. The court denied the motion to amend, citing the merger clause providing that it “contains the entire agreement between the Parties…” Apex Health, 2026 NCBC 10, ¶ 30. The court further noted that “neither the word ‘co-brand’ nor specific co-branding expectations are included in the Agreement,” id. ¶ 31. Apex was left without recourse to enforce the LOI terms through contractual interpretation.

Apex Health underscores that transaction risk occurs when LOI drift results in a material difference between the business deal everyone thinks they’ve struck and the final, signed contract. LOIs may reflect business expectations, but those expectations carry little weight unless incorporated into the definitive agreement. I’ve seen disputes erupt over everything from dispute resolution (mediation in the LOI, arbitration in the contract) to exclusivity, financial mechanics, regulatory duties, and governance. LOI drift is a practical, recurring problem that can undermine the entire transaction.

In the rush of negotiations and under pressure to close, critical LOI terms may be neglected or assumed to be addressed later, only to be forgotten. In my experience, LOI drift is especially prevalent in healthcare deals because regulatory requirements are complex, stakeholders often have competing priorities, and transactions tend to move quickly. With regulatory approvals, board sign-offs, and financing conditions all demanding attention as closing approaches, key business understandings can be overlooked or omitted during drafting, as attention shifts to resolving last-minute issues and finalizing documents. To avoid LOI drift, healthcare deal teams and their counsel should actively compare the LOI against each draft of the definitive agreement, line by line, to confirm that every material LOI term is carried forward, and directly flag any discrepancies for resolution before execution.

  • Be clear about what is binding. Spell out which provisions in the LOI are intended to bind the parties (typically confidentiality, exclusivity, and governing law) and carry that clarity into the definitive agreement. Ambiguity here often leads to mismatched expectations between business teams and counsel.
  • Track LOI terms as the deal evolves. It’s easy for key LOI terms to get lost or modified as drafts of the definitive agreement progress. A simple LOI-to-agreement matrix can help track each material provision and identify what has been incorporated, revised, or omitted. When the matrix highlights a discrepancy, deal teams can address the issue directly and catch overlooked items such as omitted regulatory covenants, missing exclusivity language, or altered financial terms before the agreement is finalized.
  • Document intentional changes. When the parties agree to depart from a term in the LOI, such as changing the dispute resolution mechanism from mediation to arbitration, the definitive agreement should clearly acknowledge and explain the change. This practice is especially important when deal teams shift positions during negotiations or when business leads and legal counsel are not fully aligned. In one recent transaction, the parties verbally agreed to drop a milestone payment provision from the LOI, but failed to document the rationale in the definitive agreement. When the omitted payment later became a point of contention, the counterparty insisted the change was a drafting oversight rather than a negotiated outcome, resulting in costly litigation over intent and credibility.
  • Use schedules and exhibits to carry detail forward. Complex terms, such as earnouts or marketing obligations, may be better preserved in schedules or exhibits incorporated by reference in both the LOI and the definitive agreement. In my experience, this approach makes it easier for deal teams to quickly locate and update key business terms without combing through the entire agreement, which is especially helpful when last-minute changes arise.

Misalignment between the LOI and the final agreement jeopardizes the intended value of the deal. As Apex Health illustrates, gaps between preliminary understandings and final contractual language create transaction risk. In my experience, the deals that avoid post-closing disputes are those where both legal and business leads take the time to verify, line by line, that every material LOI term is reflected in the final agreement before signature. Anything less is an invitation for costly surprises and post-closing disputes.

About the Author:

Dana Ulrich is a partner in the Corporate/Mergers and Acquisitions practice group, where she advises companies on mergers, acquisitions, reorganizations, divestitures, spin-offs, and recapitalizations. She also serves as outside general counsel to family office funds and counsels domestic and international companies on joint ventures, strategic alliances, corporate governance, regulatory matters, and commercial transactions.