Expressions Of Interest (EOIs) In New Zealand: What Businesses Need To Know

If you’ve ever sold a business, leased a commercial space, or tendered for a project, you’ve probably come across an “expression of interest” (EOI).

An EOI can be a great way to test the market and start serious negotiations without jumping straight into a final contract. But it can also create confusion (and real legal risk) if everyone assumes it’s “not binding” when the wording and conduct say otherwise.

Below, we break down what an expression of interest (EOI) is in New Zealand, when it’s used, what it should include, and how to protect your business when you’re inviting EOIs or submitting one.

What Is An Expression Of Interest (EOI)?

An expression of interest is usually a written document (or sometimes a structured email submission) that shows genuine interest in doing a deal, taking part in a process, or being considered for an opportunity.

In a business context, EOIs often pop up when you’re:

• selling a business and want to shortlist serious buyers before sharing sensitive financial information;
• leasing commercial premises and want to assess potential tenants before offering formal lease terms;
• running a tender for services, supply, or construction work and want to pre-qualify suppliers;
• raising capital and want early indications of investor appetite before negotiating final terms; or
• considering a partnership, joint venture, or distribution arrangement and want to explore options first.

Think of an EOI as a structured starting point. It’s a step before formal negotiations, but it’s still a business document that can shape expectations and later legal outcomes.

EOI vs Tender, Quote, Heads Of Agreement, And Final Contract

One common trap is treating all “pre-contract” documents as the same thing. They’re not.

• EOI: usually indicates interest and provides preliminary info (price range, capability, timing). It may or may not include binding elements.
• Tender/Proposal: often more detailed, sometimes capable of being accepted (depending on the process and wording).
• Quote: can be binding if it’s sufficiently certain and accepted (this is a common surprise for business owners); see Is A Quotation Legally Binding?.
• Heads of Agreement / Term Sheet: usually sets out key commercial terms, often “subject to contract”, but can still contain binding clauses; see Heads Of Agreement.
• Final contract: the definitive deal document (sale agreement, lease, services agreement, etc.).

EOIs are meant to be flexible. The key is making sure the document matches your intentions and the way you run the process matches what you’ve written.

Are Expressions Of Interest Legally Binding In New Zealand?

This is the question most business owners really want answered.

The truth is: an expression of interest can be partly binding, fully binding, or not binding at all, depending on how it’s drafted and how the parties behave.

In New Zealand contract law, what matters is whether the usual elements of a contract exist (for example: offer and acceptance, intention to create legal relations, and sufficiently certain terms). If those elements are present, a court may treat the arrangement as enforceable even if you’ve called it an “EOI”.

It also matters whether the EOI is “subject to contract” (meaning the parties do not intend to be bound until a final agreement is signed). If you want the EOI to be non-binding, you generally need to say so clearly and structure the process consistently with that.

Common Parts Of An EOI That Can Be Binding

Even where the main deal terms are non-binding, businesses often want certain parts to be binding immediately. For example:

• Confidentiality: if you’re sharing financials, customer data, supplier arrangements, or pricing strategies, you’ll often require a confidentiality undertaking (this can be inside the EOI or in a separate NDA).
• Exclusivity / lock-out: sometimes you want a short period where you won’t negotiate with other parties while one party spends money on due diligence.
• Non-solicitation: if you’re a seller sharing staff details, you might restrict the buyer from approaching your employees directly.
• Process terms: you might include clear rules about timelines, how submissions are assessed, and your ability to change the process.

These are the “risk management” parts of an EOI. They’re often where disputes happen, because the stakes are high even before the final deal is signed.

Why “Non-Binding” Wording Isn’t Always Enough

Calling a document “non-binding” helps, but it’s not a magic shield.

If your EOI contains detailed terms that look like a complete deal, and you act like a deal has been done (for example, you start performing, you announce the arrangement publicly, or you treat acceptance as final), you increase the risk that a court will find you intended to be bound.

If you’re unsure where the line is for your situation, it’s worth getting the document reviewed early. It’s usually much cheaper than dealing with a dispute later.

When Should Your Business Use An EOI Process?

Using expressions of interest can make a lot of sense when you want competition and options, but you’re not ready to commit to a single party yet.

Here are common situations where EOIs are particularly useful.

Selling A Business Or Online Business

If you’re selling your business, an EOI process can help you:

• screen out time-wasters;
• compare price expectations and deal structure (cash vs deferred payment, earn-outs, etc.);
• shortlist buyers who have the capability and funding; and
• only provide sensitive information once confidentiality and process rules are in place.

Once you’ve chosen a preferred buyer, you’ll usually move to a formal sale agreement and a structured completion process (often with a completion checklist); see Completion Checklist.

Also remember that the way you manage staff communications and continuity matters in a sale scenario. Employee rights and obligations don’t disappear just because ownership changes; see Selling Your Business: Employee Rights.

Leasing Commercial Premises

If you’re a landlord (or a tenant looking to assign a lease), EOIs can help test:

• tenant suitability (use, hours, noise, foot traffic);
• financial stability; and
• fit-out timelines and incentives.

Once you’re ready to proceed, it’s smart to have the proposed lease properly reviewed so you understand your rent, term, renewal rights, repairs/maintenance, and exit risk; see Commercial Lease Review.

Tenders For Services, Supply, Or Construction Work

For project-based work (especially where safety, technical capability, or capacity is a concern), EOIs are a common first stage before requesting a full proposal or issuing a contract.

If you’re engaging contractors or subcontractors through an EOI process, it’s important not to treat the paperwork as an afterthought. The final terms should clearly deal with scope, variations, payment milestones, defects, liability, and IP ownership; a tailored Service Agreement is often the backbone of this.

What Should An EOI Include? (A Practical Checklist)

There’s no single “one-size-fits-all” EOI in New Zealand. The right content depends on what you’re doing and what you need to protect.

That said, if you’re a small business putting together an EOI process, these are the clauses and sections we commonly see (and the ones that tend to prevent misunderstandings).

1) A Clear Description Of The Opportunity

• What is being offered (asset sale, share sale, lease, supply contract, project scope)?
• High-level commercial parameters (term, rough budget range, location, timing).
• Any key non-negotiables (for example: minimum lease term, required licences, insurance levels).

2) What You Want From The Applicant (The Submission Requirements)

• Business background and capability statement
• Relevant experience and referees
• Financial capacity (where relevant)
• Proposed price or price range
• Proposed timeline
• Any assumptions or conditions

This part is important because it lets you compare EOIs “apples with apples”.

3) A Transparent Assessment And Shortlisting Process

Your EOI should set expectations about how you’ll assess submissions. For example:

• the closing date and whether late EOIs will be accepted;
• whether you’ll interview or request further information;
• whether you’ll shortlist multiple parties;
• whether you can negotiate with more than one party at a time; and
• who bears their own costs (usually each party pays their own EOI/due diligence costs).

If you don’t spell this out, you’re more likely to face disputes about expectations, process, or “you said we were the preferred party”.

4) Confidentiality And Information Handling

EOIs often involve sensitive information, such as:

• customer lists and revenue breakdowns;
• supplier pricing;
• staffing structures and wages;
• lease terms and incentives; and
• business plans and IP.

Even if you’re not a “big corporate”, you still have legal obligations around personal information when you collect it. If you’re receiving EOIs that include personal details (IDs, references, director details, contact info), you should think about your Privacy Policy and how you store, use, and delete that information under the Privacy Act 2020.

5) A “Non-Binding” Statement (If That’s What You Want)

If your intention is that the EOI is not the final deal, say it clearly.

Many businesses use wording that the EOI is:

• an invitation to submit information;
• not an offer capable of acceptance; and
• subject to a final written agreement being negotiated and signed.

This is also where you can clarify whether any parts are intended to be binding (like confidentiality).

6) Your Right To Change Or End The Process

In the real world, circumstances change. You might receive no suitable EOIs, your funding may change, or you may decide not to proceed.

It’s common to include rights to:

• extend the closing date;
• request additional information;
• accept or reject any EOI (including the highest/lowest);
• negotiate with one or more parties; and
• cancel the process entirely.

This is one of the simplest ways to reduce disputes later about “we thought you had to pick someone”.

Key Legal Risks With Expressions Of Interest (And How To Avoid Them)

Expressions of interest are meant to reduce friction. But if they’re rushed or vague, they can create problems that are expensive to unwind.

Here are the most common legal and commercial risks we see for small businesses.

Risk 1: Accidentally Creating A Contract

If your EOI is too detailed, or you treat “acceptance” as final, you may accidentally create a binding agreement.

How to manage it:

• Use clear “subject to contract” language where appropriate.
• Avoid writing the EOI like a final agreement (save detailed mechanics for the contract stage).
• Make sure your emails and conversations match the EOI (mixed messages cause disputes).

Risk 2: Misleading Statements Or Overpromising

When you’re trying to attract good EOIs, it’s tempting to “sell the opportunity”. But be careful: statements about revenue, growth, costs, or likely outcomes can create risk if they’re inaccurate.

In New Zealand, your marketing and pre-contract statements can be caught by the Fair Trading Act 1986 (which broadly prohibits misleading or deceptive conduct in trade). This risk can apply to business sales, leasing discussions, and service procurement processes.

How to manage it:

• Stick to information you can support with records.
• Use careful wording for forecasts (and explain assumptions).
• Keep a paper trail of what you disclosed and when.

Risk 3: Mishandling Confidential Information

If you disclose sensitive information too early, or without proper confidentiality terms, you may lose commercial leverage (or face a dispute if information is misused).

How to manage it:

• Require confidentiality undertakings before sharing detailed financials or customer information.
• Provide staged disclosure (basic info at EOI stage, detailed info after shortlisting).
• Mark sensitive materials clearly and control access internally.

Risk 4: Poor Process Design (And “Unfairness” Allegations)

Even where there’s no “one-size-fits-all” approach to running an EOI, a messy process can lead to real commercial headaches - especially if a party believes they were misled about their chances, exclusivity, or selection criteria.

How to manage it:

• Set clear timelines, criteria, and reservation-of-rights language.
• Be consistent in communications across all applicants.
• Document decisions (even briefly) so you can explain your process if challenged.

Risk 5: Signing Something Without Understanding The Next Step

EOIs often lead quickly into formal documents: sale agreements, leases, services agreements, or shareholder arrangements.

For example, if an EOI is part of a sale process, the buyer may ask you to sign a heads of agreement, then push into due diligence, then request warranties and indemnities in the final contract. Each stage increases commitment and risk.

How to manage it:

• Map the stages upfront (EOI → shortlist → due diligence → final agreement → completion).
• Get advice before you grant exclusivity or share sensitive information.
• Don’t rely on templates - your process and risk profile are rarely “standard”.

Key Takeaways

• An expression of interest (EOI) is a practical first step to gauge interest and shortlist suitable parties before negotiating a final agreement.
• In New Zealand, an EOI can be binding (fully or partly) depending on the wording, the certainty of terms, and how the parties behave.
• EOIs are commonly used for business sales, commercial leases, and tendering because they help you compare options without committing too early.
• A well-drafted EOI should clearly cover the opportunity, submission requirements, selection process, confidentiality, whether it’s non-binding, and your right to change or end the process.
• Key risks include accidentally forming a contract, making misleading statements (including under the Fair Trading Act 1986), and mishandling confidential or personal information (including under the Privacy Act 2020).
• If your EOI is a gateway to bigger commitments (exclusivity, due diligence, signing heads of agreement), it’s worth getting legal advice early so you’re protected from day one.

This article is general information only and does not constitute legal advice.

If you’d like help drafting or reviewing an EOI process (or the contract that comes next), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.