What is a Letter of Intent?
A Letter of Intent (LOI) is a document outlining the understanding between two or more parties which they intend to formalize in a subsequent agreement. Think of it as a roadmap for future negotiations. It signifies a serious intention to proceed with a deal but is often non-binding, except for specific clauses like confidentiality or exclusivity. Key elements often include the parties involved, the subject of the agreement, price or consideration (if applicable), key terms and conditions, a timeline, and any provisions regarding due diligence or exclusivity.
LOIs are used in various situations, including business acquisitions, real estate transactions, employment offers, and joint ventures. They allow parties to explore the potential for an agreement without committing to a legally binding contract immediately. This can save time and money if the parties are not ultimately able to reach a final agreement. A well-drafted LOI can facilitate smoother negotiations and help prevent misunderstandings later on. Remember to always consult with legal counsel when drafting or reviewing an LOI.
Letter of Intent Samples
Sample 1: Business Acquisition LOI
[Your Company Letterhead]
[Date]
[Buyer Company Name]
[Buyer Company Address]
Subject: Letter of Intent for the Acquisition of [Target Company Name]
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to acquire [Target Company Name]. We propose a purchase price of $[Amount], subject to due diligence. Key terms include a closing date within 90 days and a standard confidentiality agreement.
Sincerely,
[Your Name]
[Your Title]
Sample 2: Real Estate LOI
[Your Name/Company Name]
[Your Address]
[Date]
[Seller Name]
[Seller Address]
Subject: Letter of Intent to Purchase Real Property
Dear [Seller Name]:
This letter confirms our interest in purchasing the property located at [Property Address]. We offer $[Amount] for the property, contingent upon satisfactory inspections and financing. Closing to occur within 60 days.
Sincerely,
[Your Name]
Sample 3: Employment LOI
[Company Letterhead]
[Date]
[Candidate Name]
[Candidate Address]
Subject: Letter of Intent for Employment Offer
Dear [Candidate Name]:
We are pleased to offer you the position of [Job Title] with a starting salary of $[Amount] per year. This offer is contingent upon successful background check and drug screening. Your start date would be [Date]. This letter is not a binding contract of employment.
Sincerely,
[HR Department]
Sample 4: Partnership LOI
[Your Company Letterhead]
[Date]
[Partner Company Name]
[Partner Company Address]
Subject: Letter of Intent for Partnership
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to partner with [Partner Company Name] to [Specific Purpose]. We propose a profit-sharing agreement of 50/50, subject to legal review and drafting of partnership agreement. Key terms include a 1 year commitment with automatic renewals.
Sincerely,
[Your Name]
[Your Title]
Sample 5: Investment LOI
[Your Company Letterhead]
[Date]
[Investor Name]
[Investor Address]
Subject: Letter of Intent for Investment
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to accept an investment of $[Amount] from [Investor Name] in exchange for [Equity Percentage]. Key terms include seats on the board and access to monthly financial statements. This letter is non-binding except for the confidentiality clause.
Sincerely,
[Your Name]
[Your Title]
Sample 6: Lease LOI
[Your Company Letterhead]
[Date]
[Landlord Name]
[Landlord Address]
Subject: Letter of Intent for Lease
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to lease property at [Address] with [Sq Footage]. Key terms include a lease period of 5 years and monthly rent of $[Amount].
Sincerely,
[Your Name]
[Your Title]
Sample 7: Service Agreement LOI
[Your Company Letterhead]
[Date]
[Client Name]
[Client Address]
Subject: Letter of Intent for Service Agreement
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to provide services to [Client Name], including [Service]. Key terms include compensation of $[Amount] per month.
Sincerely,
[Your Name]
[Your Title]
Sample 8: Loan LOI
[Your Company Letterhead]
[Date]
[Lender Name]
[Lender Address]
Subject: Letter of Intent for Loan
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to receive loan of $[Amount] from [Lender Name]. Key terms include interest rate and repayment period.
Sincerely,
[Your Name]
[Your Title]
Sample 9: Purchase Agreement LOI
[Your Company Letterhead]
[Date]
[Seller Name]
[Seller Address]
Subject: Letter of Intent for Purchase Agreement
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to purchase [Product] from [Seller Name], at the price of $[Amount].
Sincerely,
[Your Name]
[Your Title]
Sample 10: Distribution Agreement LOI
[Your Company Letterhead]
[Date]
[Distributor Name]
[Distributor Address]
Subject: Letter of Intent for Distribution Agreement
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to have [Distributor Name] distribute [Product]. Key terms include geographical area and profit distribution.
Sincerely,
[Your Name]
[Your Title]
Sample 11: Consulting Agreement LOI
[Your Company Letterhead]
[Date]
[Client Name]
[Client Address]
Subject: Letter of Intent for Consulting Agreement
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to consult for [Client Name] on [Project], at a rate of $[Amount] per hour.
Sincerely,
[Your Name]
[Your Title]
Sample 12: Franchise Agreement LOI
[Your Company Letterhead]
[Date]
[Franchisee Name]
[Franchisee Address]
Subject: Letter of Intent for Franchise Agreement
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to grant a franchise to [Franchisee Name] for [Business] in [Location].
Sincerely,
[Your Name]
[Your Title]
Sample 13: Confidentiality Agreement LOI
[Your Company Letterhead]
[Date]
[Recipient Name]
[Recipient Address]
Subject: Letter of Intent for Confidentiality Agreement
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] and [Recipient Name] to enter into a confidentiality agreement for discussion on [Project].
Sincerely,
[Your Name]
[Your Title]
Sample 14: Joint Venture LOI
[Your Company Letterhead]
[Date]
[Partner Name]
[Partner Address]
Subject: Letter of Intent for Joint Venture
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] and [Partner Name] to form a joint venture for [Project].
Sincerely,
[Your Name]
[Your Title]
Sample 15: Development Agreement LOI
[Your Company Letterhead]
[Date]
[Developer Name]
[Developer Address]
Subject: Letter of Intent for Development Agreement
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to develop [Project] with [Developer Name] at [Location].
Sincerely,
[Your Name]
[Your Title]
Sample 16: Supply Agreement LOI
[Your Company Letterhead]
[Date]
[Supplier Name]
[Supplier Address]
Subject: Letter of Intent for Supply Agreement
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to purchase [Product] from [Supplier Name] for a period of [Timeframe].
Sincerely,
[Your Name]
[Your Title]
Sample 17: Software License LOI
[Your Company Letterhead]
[Date]
[Licensee Name]
[Licensee Address]
Subject: Letter of Intent for Software License
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to license software to [Licensee Name] with a term of [Timeframe].
Sincerely,
[Your Name]
[Your Title]
Sample 18: Marketing Agreement LOI
[Your Company Letterhead]
[Date]
[Agency Name]
[Agency Address]
Subject: Letter of Intent for Marketing Agreement
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to work with [Agency Name] to perform marketing services.
Sincerely,
[Your Name]
[Your Title]
Sample 19: Non-Compete Agreement LOI
[Your Company Letterhead]
[Date]
[Employee Name]
[Employee Address]
Subject: Letter of Intent for Non-Compete Agreement
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to agree for non-compete between [Employee Name] after they leave the company.
Sincerely,
[Your Name]
[Your Title]
Sample 20: Website Development LOI
[Your Company Letterhead]
[Date]
[Developer Name]
[Developer Address]
Subject: Letter of Intent for Website Development
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to hire [Developer Name] to develop new website.
Sincerely,
[Your Name]
[Your Title]
Sample 21: Event Sponsorship LOI
[Your Company Letterhead]
[Date]
[Sponsor Name]
[Sponsor Address]
Subject: Letter of Intent for Event Sponsorship
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to have [Sponsor Name] to sponsor the event [Event].
Sincerely,
[Your Name]
[Your Title]
Sample 22: Equipment Purchase LOI
[Your Company Letterhead]
[Date]
[Seller Name]
[Seller Address]
Subject: Letter of Intent for Equipment Purchase
Dear [Contact Person]:
This letter outlines our intent for [Your Company Name] to purchase equipment from [Seller Name] to purchase [Equipment] with amount [Amount].
Sincerely,
[Your Name]
[Your Title]
Conclusion
Letters of Intent are powerful tools for initiating agreements and setting the stage for more formal contracts. They allow parties to outline key terms and conditions, assess mutual interest, and pave the way for successful negotiations. By utilizing the samples and guidance provided, you can confidently approach the LOI process, ensuring clarity and a solid foundation for future business relationships. Always remember the importance of legal counsel to ensure your LOI protects your interests.