Letter of intent (LOI),
Definition of Letter of intent (LOI):
Interim agreement that summarizes the main points of a proposed deal, or confirms that a certain course of action is going to be taken. Normally, it does not constitute a definitive contract but signifies a genuine interest in reaching the final agreement subject to due diligence, additional information, or fulfillment of certain conditions. The language used in writing a letter of intent is of vital importance, and determines whether it is only an expression of intent or an enforceable undertaking. Also called memorandum of understanding or precontract.
LOIs are useful when two parties are initially brought together to hammer out the broad strokes of a deal before the finer points of a transaction are resolved. LOIs often include provisions stating that a deal may only go through if financing has been secured by one or both parties, or that a deal may be squashed if papers are not signed by a certain date.
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 document containing a declaration of the intentions of the writer.
How to use Letter of intent (LOI) in a sentence?
- Signing a letter of intent will let someone know you are very serious about the offer you are making and they can rely on you.
- A letter of intent is a document declaring the preliminary commitment of one party to do business with another.
- You can sign a letter of intent if you wish to purchase a product at a later date but cant do it at the current time.
- The letter of intent was thoroughly scanned and examined by the teams lawyers to ensure that all terms previously agreed upon were in fact present.
- There can be no hard and fast answer to the question whether a letter of intent will give rise to a binding agreement: everything must depend on the circumstances of the particular case.
- 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.
Meaning of Letter of intent (LOI) & Letter of intent (LOI) Definition