What is a Letter of Intent?
A Letter of Intent (LOI) is a statement of understanding between two parties. LawDepot’s Letter of Intent is non-binding, meaning that the parties are not legally required to follow through with the terms of the agreement.
The Letter of Intent LOI acts as a foundation for a definitive agreement. By agreeing to the Letter of Intent, both parties intend to continue negotiations in good faith. When two parties agree to good faith obligations, it means that they are both sincere in their intent to act and carry out their promise.
What can a Letter of Intent be used for?
LawDepot’s Letter of Intent can be used to indicate an interested party’s intention to:
- Purchase or lease real estate
- Purchase or lease commercial property
- Purchase a business
- Merge businesses
- Purchase assets
- Purchase shares
Who should use a Letter of Intent?
Either party involved in a business or real estate transaction can create a Letter of Intent to set out terms for a deal.
For instance, an interested buyer might submit an LOI to a seller as a formal way to make an offer on a business. At that point, the seller could review the terms in the letter and decide if they wish to move forward with the purchase or if there are negotiations needed beforehand.
If the seller agrees to the content in the LOI, they would give their approval to move into the next stage of the transaction.
What is included in an LOI?
In a Letter of Intent for a business transaction, the letter contains terms for the purchase, including:
- Buyer and seller information
- Description of the transaction (land, location, type, etc.)
- Purchase price
Other common clauses might include:
- Confidentiality or exclusivity clauses
- Any contingencies for the deal, such as passing the due diligence process
Why should I use a Letter of Intent?
In business or real estate transactions, the purpose of an LOI is to provide an overview of the purchase details in advance of a binding agreement. It allows the seller to evaluate their options before agreeing to the terms with a buyer and saves on the costs involved with negotiation and due diligence.
Information needed to make a Letter of Intent
This document is rather simple. You should be able to make a professional agreement within a few minutes if you know a bit of basic information. Here is what you’ll need:
- Your contact information, title and business name
- Prospective transaction and purchase price details
- Liabilities or obligations
- Negotiation rights
- How long until the letter terminates
The rest of the document is auto-filled when you submit the above information. Once created you can save, share and edit the document online. You can request an electronic signature or print the Letter of Intent for signing.
Letter of Intent Sample
Dear JobTech team,
My name is Jean Smith, and I am writing to you today to submit my resume for consideration on your Sales and Marketing teams. As a proven leader with more than a decade of beating aggressive sales goals and working with diverse teams to produce great results, I am very interested in opportunities to bring that experience and growth to JobTech.
With 12 years of experience in Sales and Marketing in a variety of different roles (from an all-hands-on-deck startup to a Fortune 500 company), I know I can bring a strong, customer-oriented strategy to your company. Since graduating with a B.A. in Marketing from Benjamin Franklin University in 2005, I’ve built my career on using customer data and strategic campaigns to get results. Most recently, as Sales Leader at Career Industries, my innovative sales strategies and overhaul of our social media lead generation program increased widget sales by more than 200% from 2013 to 2016. While my time at Career Industries has been a valuable experience, I’m ready to move on and grow into a senior manager position that better blends sales, marketing, and innovative strategy. Based on JobTech’s commitment to being on the cutting edge of widget sales, I believe my skills and background jibe well with that mission.
I look forward to talking with you about my qualifications, and potential opportunities with JobTech. I am attaching my resume, and have a comprehensive career profile at www.joblinkcareernetworking.com/JeanSmith. If you have any questions, please don’t hesitate to reach me at J_Smith@emaildomain.com. Thank you for your time and consideration!