Free Letter of Intent Template (Business) | Sample & Template | LawDistrict

A Letter of Intent, or LOI, is a legal document that establishes the intentions and conditions for two or more parties to enter into a contract. It can be used as a precursor to a formal contract.

A Letter of Intent does the following: 

• Communicates each party’s desire to formalize the agreement.

• Establishes details before signing a contract.

• Gives reassurances to each party that all intentions are sincere. 

• Provides a framework for future discussions. 

• Assists the parties in verifying the details of the agreement. 

A Letter of Intent is useful when you want to show good faith, and help to progress the process of creating a formal agreement. 

The document will usually set a limit for creating and signing a contract. 

There are various types of LOIs, such as for real estate purchases, attending college or graduate school, to hire an employee, and many other types of arrangements. 

Use our  Letter of Intent template to create a document that includes all the terms and conditions of a future contract. 

Is a Letter of Intent legally binding?

A Letter of Intent is normally non-binding. However, it does serve as an important means for establishing the terms and conditions for entering into a formal agreement.

For it to be enforceable, you would need to ensure there are terms that state the document is a binding agreement. 

There could be certain consequences if a party does not comply with the agreed-upon terms of the letter if the document is binding. 

For example, If one party drops out of the arrangement, they could be held financially liable for any financial damage the other party receives.