Letter of Intent (LOI)
A letter of intent (LOI) is a document declaring the preliminary commitment of one party to do business
with another. The letter outlines the chief terms of a prospective deal. Commonly used in major business
transactions, LOIs are similar in content to term sheets. One major difference between the two, though, is
that LOIs are presented in letter formats, while term sheets are listicle in nature.
- A letter of intent is a document declaring the preliminary commitment of one party to do business
with another - The letter outlines the chief terms of a prospective deal and is commonly used in business
transactions. - LOIs are useful when two parties are initially brought together to hammer out the broad strokes of a
deal before resolving the finer points of a transaction. - Terms included in an LOI are certain stipulations, requirements, timelines, and the parties involved.
- Many LOIs include non-disclosure agreements (NDAs) and no-solicitation provisions.
- Letters of intent are also used outside of the business world in any circumstance where two parties
intend to work together or form a deal.