Business Letter of Intent Sample for 2023

What Is a Letter of Intent?

A letter of intent (LOI) is a document that outlines a business agreement between two parties prior to signing a formal contract. It is a non-binding agreement that sets forth the terms and conditions of the potential deal. It’s a formality that encourages both parties to demonstrate their commitment to the deal.

Why Write a Letter of Intent?

A letter of intent helps both parties clarify the terms of the agreement and avoids misunderstandings. The document allows both sides to come to an understanding before entering a formal contract. It also gives both parties the chance to negotiate the terms further, such as price and timeline, before making a formal commitment.

What Should Be Included in a Letter of Intent?

A letter of intent should include the following information: a description of the deal, the parties involved, the timeline, a list of deliverables, and any specific terms and conditions. It is important to be concise and detailed in the letter to avoid any confusion. Additionally, it should be signed by both parties.

Sample Letter of Intent

Here is an example of a letter of intent for a business agreement:

Re: Business Agreement Between [Company Name] and [Partner Name]

This letter of intent is intended to outline the general terms and conditions of the proposed business agreement between [Company Name] and [Partner Name]. The parties agree to enter into a formal agreement once all details have been agreed upon and signed by both parties.

The parties agree to the following terms and conditions:

1. [Company Name] will provide [Partner Name] with [describe services or goods].

2. [Partner Name] will pay [Company Name] [dollar amount] for [describe services or goods].

3. The agreement will commence on [date] and will terminate on [date].

The parties agree to negotiate in good faith and enter into a formal agreement as soon as possible. If either party fails to live up to the terms of this letter of intent, the other party may terminate the agreement.

Sincerely,

[Company Name]

[Partner Name]

Conclusion

A letter of intent is a document that outlines the terms of a proposed agreement between two parties. It is a non-binding agreement that allows both sides to negotiate the terms further before entering into a formal contract. It is important to be detailed and concise in the letter to avoid any misunderstandings. A sample letter of intent is provided above.