Use our letter of intent to declare your intention to purchase a good or service.
Updated May 3, 2024
Written by Sara Hostelley | Reviewed by Brooke Davis
A letter of intent (LOI) is a formal written document expressing a party’s intention to enter into a contract or agreement. It outlines the main terms of the future agreement and shows a serious commitment to a deal.
This document is most common in business transactions and purchases. Still, individuals can also use it to affirm their interest in or communicate a goal they want to achieve for a job, academic program, research project, or another collaboration.
Below, you can find different versions of LOIs that fulfill the same purpose as a traditional LOI but for unique situations.
Highlight how the background and particular experiences of an applicant demonstrate their fit and resonance with a company’s ethos and goals, showcasing their preparedness and eagerness for the position.
Introduce yourself and show interest in obtaining a paid or unpaid internship with an organization or company.
Create a school letter using our template to demonstrate your enthusiasm for attending the educational institution and achieving your academic aspirations.
Use it between the Seller of real property and a potential Buyer of the real property. You would use a Real Estate Purchase Agreement to complete the deal.
Use it to make a basic, binding, or non-binding offer for an investment with principal members.
Use it to show your commitment to undertake work for a general contractor.
Use it between the Seller of a business and a potential Buyer. Eventually, you would use a Business Purchase Agreement to complete the deal.
State your intention to purchase a limited number of shares at a specific price.
Use this document to express your interest in a potential purchase. A General Purchase Agreement will be needed to complete the deal.
Establishes how your donation will be used once received by the donee.
Used between parties to document a potential transaction, such as providing goods or services over a given period of time.
Use it to formalize the student-athlete's commitment to play sports at NCAA schools.
Use it to show that an alien fiancé and a US citizen petitioner intend to marry each other within 90 day.
Use to inform prospective defendants of their plan to sue and give them a chance to pay a settlement demand instead
Used for outlining a potential collaboration between a software developer and an interested client.
Use a Personal Property Letter of Intent between a seller of personal property, like a car or jewelry, and a potential buyer to express their preliminary interest in the transaction. You would use a Personal Property Purchase Agreement to complete the deal.
Because a letter of intent discusses a potential transaction, it’s usually nonbinding. Even though it’s not a legally binding agreement, it acts as a moral commitment between two parties promising to discuss a future arrangement in good faith.
However, certain sections of the LOI may be legally binding. If the letter contains legally binding elements, it will hold one or both parties accountable to certain terms and be enforceable by the law.
Some examples of legally binding aspects of an LOI include the following:
Some LOIs will include all of these legally binding elements, while others will only include a few or none. It’s essential for the parties to include clear language indicating which terms are subject to alteration by the future agreement and which terms are already established.
Ensure that you carefully draft your LOI and understand the terms to which you’ll be held liable before signing it.
Use a letter of intent to establish a preliminary agreement, ensuring that you include nonbinding language to avoid any confusion or assumptions from the other party. Without this document, you might miss out on an opportunity because another party shows more serious intent.
Here are some specific instances when an intent letter would be useful:
A potential homebuyer may use an LOI to show their intention to purchase a specific property. The letter may contain a property description and details for a desired timeline. However, the terms can change slightly as the negotiations proceed. It may also require that a buyer obtain financing before moving forward with the formal agreement.
In a competitive real estate market, a tenant may use an LOI to show interest in renting a property. While a residential tenant may use this letter, it’s more common for a commercial tenant. A commercial tenant may use this document to specify what improvements they want the landlord to make to accommodate their needs before proceeding with the negotiations.
Two parties can use an LOI to settle on specific terms for buying goods or services before signing a finalized purchase agreement or service agreement.
The parties can sign this document to show each other a good faith intention to negotiate a deal. It can also help parties get on the same page as to what they expect from the purchase. A letter of intent could be used after a request for a proposal from vendors.
An employer often sends an LOI to a prospective employee after a successful job interview. They use this document to communicate the terms of the employment offer. If the employee currently works for the employer, the employer may use it to negotiate the terms for a pay raise or a higher-level position.
This letter can also be useful for prospective employees, as they may write this communication to relay their intent to join a company.
Some universities require or prefer candidates to submit an LOI when applying for admission into undergraduate or graduate programs. Use this letter to express your interest in a particular program, distinguishing you from other potential students when spots are limited.
Write an LOI to set the groundwork for buying or merging with another company. For example, the document may state that one party agrees to sell their business for a specific price but doesn’t yet explain who will take on certain business liabilities.
Use an LOI to outline the terms of a potential partnership or joint venture. Explain desired terms like the arrangement’s duration, contributions by each party, end goals for the collaboration, and decision-making protocols.
While an LOI can help two parties complete a more definitive agreement later, they may decide not to proceed with the details in the letter if certain conditions aren’t met (like a lack of funding from one party).
The elements to include in your letter of intent may vary depending on your end goal. For any transactional letter, ensure that you include the following elements:
A nontransactional letter of intent may require different elements, such as:
Here are the steps for writing a basic letter of intent. You may have to adjust the steps slightly depending on the reason for writing this document.
Fill out the essential information regarding the seller, buyer, and transaction.
If the agreement is transactional, include details about the purchase price. If you and the other party decide to forgo agreeing on a purchase price until one party completes due diligence, you can note the decision here.
You can detail that a certain amount will be required upon signing the letter or, if you’re using one, upon signing a purchase agreement.
If you and the other party subject the proposed transaction to any conditions, include them in your letter. You can also emphasize if the seller agrees not to negotiate directly or indirectly with any other party concerning the item.
The parties can include certain conditions that must occur before they sign the final agreement, such as:
You can also clarify whether the parties should maintain confidentiality about the agreement or if they have certain covenants to complete during negotiations.
State when the letter will terminate. For example, it could be upon executing a purchase agreement or a mutually written agreement between the parties.
Detail which state’s laws will govern the LOI and include a clause on whether the letter is binding or non-binding.
Finish your letter by having both parties sign the document.
Download a free letter of intent template as a PDF or Word file below and customize it for your specific intentions:
Create Your Letter of Intent in Minutes!
