Jump to Section
A letter of intent is a formal document outlining one's intentions for a specific action, such as applying for a job or program or initiating a purchase. It could also be used to clarify specific points in a business transaction. A job candidate might send a letter of intent to a business if they wanted to work for the company, but there wasn't a specific job they were applying for. The candidate might submit a letter of intent along with a general application.
The letter of intent shows interest in the other party and deals with them in a respectful and professional manner. It states your intentions without actually entering into an agreement regarding the business arrangement. When a letter of intent is used between businesses, it allows the individual parties to define their relationships and their future plans without involving lawyers and generating significant legal costs. Though the document isn't legally binding, it is a show of good faith.
Letter of Intent Templates
Other Names of a Letter of Intent
A letter of intent is sometimes referred to as:
- Terms sheet
- Framework letter
- Letter of interest
- Intent to purchase letter
- Assurance letter
Steps to Write a Letter of Intent
Here are the basic steps you should follow to write a general letter of intent that could be used to clear an intent to purchase or to plan a business arrangement:
- Determine the Name of the Recipient. While there may be situations where you need to include a general greeting, like if you're sending the letter to multiple people, in most cases, it's best to send your letter of intent to a specific individual. This will increase the likelihood that the letter will reach the right person.
- Choose the Best Greeting. The most common greeting is "Dear Mr./Ms. Last Name." If the person you're sending the letter to has a professional title, such as Professor or Dr., you should use that instead.
- Write the Body. This part of the letter will vary depending on the purpose of your letter of intent. In general, the first paragraph should state the purpose of your letter. If you're purchasing real estate or a business, you should state the terms that are proposed for the purchase. If you're expressing interest in working for a company, you should highlight the qualifications that would make you ideally suited for a job at the company. If you're sending a letter of intent to accept a scholarship, you should express your appreciation and enthusiasm in an appropriate, professional manner.
- Include a Professional Closing. Always use a professional closing. "Sincerely" or "Yours truly" often work well. Write or type your name under the closing.
Types of Letters of Intent
Here are a few specific examples of different types of letters of intent :
- Purchase of Real Estate, Business, or General Property: You can use a letter of intent to state your intention to purchase commercial or residential property or a business. The letter should specifically state that it isn't an official purchase agreement and that the terms and conditions of the business transaction are to be stated in the actual purchase agreement that must be agreed upon by all relevant parties.
- Scholarship Acceptance: A student could send a letter of intent to an institution or organization when accepting a scholarship. The letter should express appreciation for the scholarship and excitement for the opportunity.
- Graduate School: If you intend to submit an application to attend a specific graduate school, you could send a letter of intent to that university. Some schools may even require a letter of intent as part of their application process. The letter should let the recipient know that you've submitted your application and list the graduate program for which you're applying.
- Acquisition: This type of letter of intent is similar to the one that you would use when purchasing a business. However, it should be marked as confidential. As a sender, you may want to include the basic terms of the deal in addition to a nonbinding statement about the preparation of the agreement and procedures for negotiation.
- Employment: You could send a letter of intent to express interest in working for a company, even if there isn't a specific opening available. The letter can state the type of position you're interested in or whether you're looking for an opening in a particular department.
Benefits of a Letter of Intent
The following are the benefits of a letter of intent:
- Outlines Goals: An LOI aids both parties in outlining their goals and expectations for a future transaction. It gives the early discussions a well-structured framework, ensuring everyone is on the same page. It offers the early discussions a well-structured framework, ensuring everyone is on the same page. This is beneficial since it makes certain that everybody is on the same page and working closer to the same goal.
- Assists in Negotiation: It outlines the essential parameters of the agreement, enabling parties to pinpoint points of agreement and dispute. Narrowing the focus of the negotiation to the most important topics helps speed up the process.
- Provides Legal Protection: A letter of intent contains several legal clauses to protect both parties throughout the negotiation process.
- Encourages Settlement in Good Faith: Even though a letter of intent is typically not legally enforceable, it frequently includes a clause promising that both parties would negotiate a settlement in good faith. This commitment can promote trust and cooperation in negotiations.
- Saves Time: Companies can save time and money by creating a thorough LOI before moving forward with a formal contract. If the parties can come to an understanding of the key points outlined in the LOI, the time-consuming and expensive process of drafting a comprehensive contract can be avoided.
- Conducts Due Diligence : The process of due diligence is frequently started with the LOI. It permits the buyer or recipient of the proposal to look into the company, assets, or property in more detail before committing to the deal in writing.
- Includes Binding Clause: Although the LOI is often non-binding, it can contain some binding clauses, such as exclusivity clauses that forbid the seller or landlord from negotiating with anyone else for a predetermined time.
- Allows Customization: The LOI is a versatile document that can be modified to meet the particular requirements of the transaction. Parties are free to add restrictions and clauses specific to their circumstances.
- Maintains Records: It provides written evidence of the negotiation process, which is helpful if any controversies subsequently emerge. The final contract can be used as a point of reference.
- Incorporates Confidentiality Clause : The main advantage of a letter of intent is the inclusion of clauses that are advantageous to both parties. For instance, parties frequently include a confidentiality clause in a letter of intent. This confidentiality provision will ensure that any confidential information given will be safeguarded even if negotiations do not result in an agreement.
- Grants Exclusivity Benefit: Additionally, exclusivity-allowing terms may be included in letters of intent. As a result, early in the negotiation process, parties cannot negotiate with one another. This is advantageous since it eliminates possible negotiating chips and guarantees that parties won't hastily include particular contractual clauses in response to outside pressure.
- Functions as a Memorandum of Understanding (MOU): An LOI can occasionally serve as an MOU, which is a preliminary step to a more official agreement. MOUs are employed by parties who want to express their commitment to examining the potential for future partnership.
Letter of Intent vs. Cover Letter
Admittedly, letters of intent can be similar to cover letters when used for the purpose of finding a job. However, there are some differences. A letter of intent:
- Is more focused on the company than a specific role
- Speaks in more general terms about the candidate's skill set
Cover letters, on the other hand, tend to be
- Focused on the specific job
- Discuss the candidate's skills as they relate to that job
Letter of Intent Sample for Asset Purchase (Non-Binding)
Dear [NAME]:
This letter of intent (“Letter of Intent”) sets forth proposed terms of [BUYER NAME] (“Buyer”) purchase of all assets related to [ASSET NAME] and you (“Seller”). Buyer and Seller are referred to collectively as the “Parties.”
This letter does not address all matters upon which agreement must be reached for the proposed transactions to be consummated. The Parties intend to execute a definitive Asset Purchase Agreement and other necessary documentation (the “ Definitive Agreements ”) at a later date.
The Parties agree that this Letter of Intent is intended as only outline of certain terms and should not be considered binding on both Parties.
In general, the proposed transaction would be as follows:
- Execution Date. The Parties intend to execute an Asset Purchase Agreement no later than [DATE]. The Asset Purchase Agreement shall be subject to the conditions outlined in this document.
- Subject Property. The subject property of this Letter of Intent shall be the assets, inventory, equipment, goodwill, and contracts, including but not limited to [ASSETS] (the “Purchased Assets”). A list of the Purchased Assets is attached as Exhibit “A.” Buyer will not assume any debt or other obligations of Sellers.
- Definitive Agreements. Seller and Buyer will negotiate in good faith a definitive Asset Purchase Agreement and certain ancillary transaction documents, such as an assignment of contract (the “Definitive Agreements”).
- Due Diligence. During the [ DUE DILIGENCE PERIOD TIMEFRAME] day Due Diligence Period, Buyer and his representatives shall have full opportunity to review the business, properties, affairs, prospects, books, and records related to the Purchased Assets and to obtain information that it deems relevant from the management, bankers, lawyers, accountants, and other consultants of Sellers. Sellers shall furnish to Buyer such financial and other data and information as is requested for the completion of Buyer’s due diligence. Buyer agrees to keep confidential and not to use for any purpose any confidential information provided by Sellers.
- Suitable Financing. Execution of the Asset Purchase Agreement is contingent on Buyer’s ability to acquire suitable financing. Buyer retains the right to make the final determination as to the suitability of financing.
- Expenses. Other than the fees associated with the escrow agent, it is expressly understood that Buyer will not be responsible for any transaction-related expenses incurred by Sellers, and Sellers will not be responsible for any transaction-related expenses incurred by Buyer. All legal, accounting, due diligence, and other costs and expenses incurred in connection with the closing of the transaction shall be paid by the party incurring such expenses.
- Confidentiality. Sellers and Buyer agree that, prior to the closing date, any public announcement relating to the proposed transaction must be approved by both parties prior to release to the public.
- Miscellaneous. Pending execution of a mutually acceptable Definitive Agreements, Sellers will conduct its business in the ordinary course.
If the foregoing reflects the present intention of, and is generally acceptable to you, please execute and date the enclosed counterpart signed by Buyer and return such executed counterpart to the undersigned.
Very truly yours,
_________________________
Date: _____________
Accepted: _________________________
Date: _____________
Tips for Writing a Letter of Intent
Here are some tips you can use to help you write a letter of intent:
- Use an Appropriate Format. Use a business letter format that includes both parties' contact information and the date the letter is created.
- Include a Clear Subject Line. If you're sending your letter via email, include a concise subject line that states the purpose of the letter. If you're sending the letter in this way, you don't need to include contact information at the top of the letter for both parties. You can place your contact information under the signature at the bottom.
- Proofread Carefully. Read the letter of intent closely to look for typos and grammatical errors.
- Use a Professional Greeting. Try to send the letter to someone specifically and professionally greet them. If the letter is being sent to several people, you can use a general greeting like, "To whom it may concern."
- Use Short Paragraphs. You should keep your letter brief with short paragraphs to increase the likelihood that the recipient will read the letter in full. This is particularly true if you're sending a letter of intent expressing your interest in a job at a company.
- Research the Company. If you're writing a letter of intent to apply for a job at a company, research the company in advance to better understand its mission and culture. This can help give you a sense of how you could potentially add value.
- Use Bullet Points. Consider using bullets to highlight your qualifications for a job or key points you want to emphasize in a business deal. Bullets will help to draw attention to this information and ensure it isn't overlooked when the recipient scans the letter.
- Keep Your Letter Short. Your letter of intent should never be longer than one page.
Letter of Intent Templates
- Letter of intent for a job
- Letter of intent for a job opening
- Letter of intent for a job in the same company
- Letter of intent for a job application
- General letter of intent
Final Thoughts on a Letter of Intent
A letter of intent is only a preliminary record and serves more often than not to clarify the parties' desires and open discussions. Except for any precise conditions that can be expressly detailed to be binding, it isn't a settlement that is enforceable in a courtroom. A robust and well-drafted letter of intent can build the foundation for a fruitful and positive agreement. Still, it's far more important to proceed with in-depth negotiations and a formal settlement, such as an agreement or definitive agreement, to ensure all conditions are documented and legally enforceable.
If you are looking to get free pricing proposals from vetted lawyers that are 60% less than typical law firms, you can click here to get started. By comparing multiple proposals for free, you can save time and stress of finding a quality lawyer for your business needs.
Meet some of our Letter of Intent Lawyers
Terence B.
Terry Brennan is an experienced corporate, intellectual property and emerging company transactions attorney who has been a partner at two national Wall Street law firms and a trusted corporate counsel. He focuses on providing practical, cost-efficient and creative legal advice to entrepreneurs, established enterprises and investors for business, corporate finance, intellectual property and technology transactions. As a partner at prominent law firms, Terry's work centered around financing, mergers and acquisitions, joint ventures, securities transactions, outsourcing and structuring of business entities to protect, license, finance and commercialize technology, manufacturing, digital media, intellectual property, entertainment and financial assets. As the General Counsel of IBAX Healthcare Systems, Terry was responsible for all legal and related business matters including health information systems licensing agreements, merger and acquisitions, product development and regulatory issues, contract administration, and litigation. Terry is a graduate of the Georgetown University Law Center, where he was an Editor of the law review. He is active in a number of economic development, entrepreneurial accelerators, veterans and civic organizations in Florida and New York.
Ryenne S.
My name is Ryenne Shaw and I help business owners build businesses that operate as assets instead of liabilities, increase in value over time and build wealth. My areas of expertise include corporate formation and business structure, contract law, employment/labor law, business risk and compliance and intellectual property. I also serve as outside general counsel to several businesses across various industries nationally. I spent most of my early legal career assisting C.E.O.s, General Counsel, and in-house legal counsel of both large and smaller corporations in minimizing liability, protecting business assets and maximizing profits. While working with many of these entities, I realized that smaller entities are often underserved. I saw that smaller business owners weren’t receiving the same level of legal support larger corporations relied upon to grow and sustain. I knew this was a major contributor to the ceiling that most small businesses hit before they’ve even scratched the surface of their potential. And I knew at that moment that all of this lack of knowledge and support was creating a huge wealth gap. After over ten years of legal experience, I started my law firm to provide the legal support small to mid-sized business owners and entrepreneurs need to grow and protect their brands, businesses, and assets. I have a passion for helping small to mid-sized businesses and startups grow into wealth-building assets by leveraging the same legal strategies large corporations have used for years to create real wealth. I enjoy connecting with my clients, learning about their visions and identifying ways to protect and maximize the reach, value and impact of their businesses. I am a strong legal writer with extensive litigation experience, including both federal and state (and administratively), which brings another element to every contract I prepare and the overall counsel and value I provide. Some of my recent projects include: - Negotiating & Drafting Commercial Lease Agreements - Drafting Trademark Licensing Agreements - Drafting Ambassador and Influencer Agreements - Drafting Collaboration Agreements - Drafting Service Agreements for service-providers, coaches and consultants - Drafting Master Service Agreements and SOWs - Drafting Terms of Service and Privacy Policies - Preparing policies and procedures for businesses in highly regulated industries - Drafting Employee Handbooks, Standard Operations and Procedures (SOPs) manuals, employment agreements - Creating Employer-employee infrastructure to ensure business compliance with employment and labor laws - Drafting Independent Contractor Agreements and Non-Disclosure/Non-Competition/Non-Solicitation Agreements - Conducting Federal Trademark Searches and filing trademark applications - Preparing Trademark Opinion Letters after conducting appropriate legal research - Drafting Letters of Opinion for Small Business Loans - Drafting and Responding to Cease and Desist Letters I service clients throughout the United States across a broad range of industries.
Stacey D.
I enjoy helping businesses of all sizes succeed, from start-ups to existing small and medium sized businesses. I regularly advise corporate clients on a variety of legal issues including formation, day to day governance, reviewing and drafting business contracts and other agreements, business acquisitions and sales, as well as commercial and residential real estate issues, including sales, purchases and leases. As an attorney licensed in both Michigan and Florida, I also advise clients on real estate issues affecting businesses and individuals owning real property in either state, whether commercial, residential or vacation/investment property. I also regularly assist nonprofit organizations in obtaining and maintaining tax exempt status, and provide general legal counsel on all matters affecting public charities, private foundations and other nonprofit organizations.
March 14, 2024
Davy K.
I am a Swiss-American lawyer based in Florida and specialize in business, investments, and other civil matters. I have won many cases in both state and federal litigation, and arbitration. Before litigation or arbitration, however, I like to prevent these legal disputes by ensuring my clients base their business on strong concrete contracts that will protect them even decades down the road. My clients are my top priority, which is why they get my personal cell and can reach me anytime. My firm is also established on the extremely high standards of professionalism, transparent itemized billing, fast turnaround times and more. For more information, visit: https://www.transnationalmatters.com/
Find the best lawyer for your project
Browse Lawyers NowBusiness
Letter of Intent
Nevada
What do I need for a letter of intent?
I have recently started a brand new online business, still in the stages of receiving all my licenses and website. I am trying to attend a Las Vegas fashion trade show called Magic, and to register, I need a letter of intent on official letter head from an attorney. Stating intent, type of business, and anticipated start date. I was wondering if thats something any attorney can do, and what documents you would need to do official letter of intent. Thank you.
Jane C.
Yes. A lawyer can assist you with a letter of intent. Schedule a consult.
Contracts
Letter of Intent
Pennsylvania
Letter of intent
I registered a startup clothing boutique in PA and I planned to attend a fashion trade show to purchase from wholesale vendors. Because I am a startup and my business is not up and running I am required to provide a letter of intent for my boutique. How do I go about getting a letter of intent signed by lawyer?
Amy Sue L.
A "letter of intent" is typically not signed by a lawyer, it is signed by two or more parties who intend to enter into a transaction together in the future, but who do not yet have sufficient details regarding the terms of the transaction to enter into a formal agreement. Has the trade show given any additional info / context about this request? - I think your question has not been answered because your use of the term "letter of intent" and "lawyer" in this context is unusual. More information about what you mean by "registered a startup" would also be helpful - if you have formed a company, you should be able to provide a certificate of good standing or other evidence of that formation to the show, which may be sufficient. If you cannot provide that documentation, I wonder if you are also using the term "registered" in another, non-traditional way (from a legal point of view)? Happy to try to help with more info!
Corporate
Letter of Intent
Texas
Can a buyer back out of a purchase agreement?
I am trying to sell my company and the buyer has gone silent. We have top terms agreed to and a LOI signed, but we have not put a purchase agreement in place yet. Can they legally back out if we have a LOI signed?
Michael S.
With the caveat that I am a Pennsylvania and not Texas attorney, most LOI's are non-binding, unless the LOI itself provides otherwise. A lawyer would need to review the LOI to determine whether the deal can be enforced. Mostly likely, however, it cannot be enforced.
Business Contracts
Letter of Intent
Ohio
What is the purpose of a letter of intent?
I am buying a small business and have read I should put a letter of intent in place. I see they can be binding and non-binding. Why do I need to send a letter of intent? What is the benefit for the buyer?
Donya G.
A letter of intent establishes the initial negotiations of the parties; they are typically non binding. The LOI sets out what the parties should expect the agreement would look like, so that everyone is on the same page. For the buyer, it tells the seller what they want; and while no binding, it should only include terms that the parties agree upon. Those terms will be used in the Asset Purchase Agreement (APA) or Purchase and Sale Agreement (PSA) which is binding. As an attorney that focuses on the purchase and sale of businesses, I can assist you with the LOI as well as the documents required for purchasing the business and closing the deal. Donya Gordon
Need help with a Letter of Intent?
Business lawyers by top cities
- Austin Business Lawyers
- Boston Business Lawyers
- Chicago Business Lawyers
- Dallas Business Lawyers
- Denver Business Lawyers
- Houston Business Lawyers
- Los Angeles Business Lawyers
- New York Business Lawyers
- Phoenix Business Lawyers
- San Diego Business Lawyers
- Tampa Business Lawyers
Letter of Intent lawyers by city
- Austin Letter of Intent Lawyers
- Boston Letter of Intent Lawyers
- Chicago Letter of Intent Lawyers
- Dallas Letter of Intent Lawyers
- Denver Letter of Intent Lawyers
- Houston Letter of Intent Lawyers
- Los Angeles Letter of Intent Lawyers
- New York Letter of Intent Lawyers
- Phoenix Letter of Intent Lawyers
- San Diego Letter of Intent Lawyers
- Tampa Letter of Intent Lawyers
ContractsCounsel User
LOI from Investor for purchase of company shares
Location: Pennsylvania
Turnaround: Less than a week
Service: Contract Review
Doc Type: Letter of Intent
Page Count: 3
Number of Bids: 3
Bid Range: $275 - $500
User Feedback:
ContractsCounsel User
Business purchase letter of intent/purchase offer
Location: Louisiana
Turnaround: Less than a week
Service: Drafting
Doc Type: Letter of Intent
Number of Bids: 6
Bid Range: $1 - $1,000
related contracts
- Asset Acquisition Agreement
- Asset Acquisition Contract
- Asset Purchase
- Asset Purchase Agreement
- Asset Purchase Due Diligence Checklist
- Asset Sale
- Business Acquisition Agreement
- Business Acquisition Contract
- Business Acquisition Due Diligence Checklist
- Business Purchase Agreement
other helpful articles
- How much does it cost to draft a contract?
- Do Contract Lawyers Use Templates?
- How do Contract Lawyers charge?
- Business Contract Lawyers: How Can They Help?
- What to look for when hiring a lawyer