A Letter of Intent (LOI) is non-binding and serves as a preliminary agreement before signing a binding contract. It is generally used to signal interest in pursuing a deal known to the LOI parties.With this document, you can discuss the terms of a future agreement or continue to negotiate, all without involving an attorney's services for the informal nature of the LOI.
What Is a Letter of Intent?
Suppose you are looking to enter into a business relationship with an individual or a company. In that case, you may want to signal your intention before getting into the nitty-gritty, whether this is because you are incredibly interested or for fear of another company beating you to the punch. With a LOI, you can demonstrate your agreement with specific terms as you continue to negotiate the rest.
As stated before, the LOI is more of a formality rather than a legally binding contract. It is most commonly used to propose purchases, mergers, and acquisitions. As part of the terms, a LOI can contain a price agreed upon in addition to other consensual details of the deal.
It is such a generally useful document. Even students use LOIs to indicate their intention to accept a scholarship or college admission offer.
Other Names for a Letter of Intent
Depending on your state, a Letter of Intent may also be known as:
- Assurance Letter
- Letter of Assurance
- Letter of Interest
- Memorandum of Understanding
- Terms Sheet
Who Needs a Letter of Intent?
Sometimes companies and people are interested in collaborating, but they don't want to sign any agreement yet because they want more negotiating. Perhaps one party would like to purchase another party's estate but isn't sure about current liabilities. In these situations, they decide to sign a Letter of Intent to show good faith and interest in working together. It helps the two to negotiate terms and eventually come up with something that works for both.
Why Use 360 Legal Forms for Your Letter of Intent?
Customized for you, by you
Create your own documents by answering our easy-to-understand questionnaires to get exactly what you need out of your Letter of Intent.
Specific to Your Jurisdiction
Laws vary by location. Each document on 360 Legal Forms is customized for your state.
Fast and easy
All you have to do is fill out a simple questionnaire, print, and sign. No printer? No worries. You and other parties can even sign online.
How to Create a Letter of Intent with 360 Legal Forms
Drafting a Letter of Intent doesn't have to be a hassle. You can create yours with a few clicks on our website. Make sure to include all the necessary information.
Let 360 Legal Forms help with our extensive library of attorney-vetted legal forms. The process is fast and easy. All you have to do is fill out our easy-to-understand questionnaire. Once complete, simply download your form as a PDF or Word document from your secure online account.
What Information Will I Need to Create My Letter of Intent?
To create your document, please provide:
- Parties Information: The names of the individuals or companies writing the Letter of Intent, the contact number, and addresses.
- Terms: Describe all of the terms agreed upon, including the price as appropriate.
- Closing Date: The latest date when the parties enter into an agreement for the matter at hand.
- Contingencies: Conditions determining if the deal goes through or not.
- Governing Law: The state's law applying to the Letter of Intent.
Letter of Intent Terms
- Terms: Anything agreed upon, including the purchasing price.
- Covenants: Promises made while negotiating the deal.
- Confidentiality: In the context of a Letter of Intent, this is the condition to keep information private regarding the potential deal.
- Special Terms: Any other terms, usually non-standard, agreed upon.
Letter of Intent Signing Requirements
After printing out the LOI, you might want to review and proofread it. After that, get everyone to sign it. Witnesses and notarization are not necessary as the LOI is not designed to be binding.
What to Do with Your Letter of Intent?
After signing the LOI, it is customary to distribute a copy to all involved. It does not have to be filed with any governing body.
