A Letter of Intent (LOI) is a document outlining the preliminary understanding between two or more parties who intend to enter into an agreement. It’s essentially a non-binding agreement that outlines the key terms of a proposed deal or transaction. While not legally enforceable in its entirety (certain clauses like confidentiality might be), it serves as a roadmap and demonstrates a serious interest in moving forward. LOIs can be used in a wide range of situations, from business acquisitions and real estate transactions to employment offers and partnership agreements. The key is clarity and precision in outlining the intended terms.
Understanding the nuances of a Letter of Intent is crucial for a successful negotiation and eventual agreement. The following 12 examples cover various scenarios and highlight the key elements that should be included depending on the specific context. Each example is followed by a brief explanation of its purpose and essential components. These examples are provided as templates only, and it is always recommended you seek legal counsel prior to finalizing any Letter of Intent to ensure it accurately reflects your intentions and protects your interests. Remember to tailor each template to your specific situation and consult with legal professionals for personalized advice. This article provides templates for: Business Acquisition, Real Estate Purchase, Job Offer, Partnership, Investment, Mergers, Joint Venture, Lease Agreement, Service Agreement, Scholarship, Grant Application, and Equipment Purchase.
1. Business Acquisition Letter of Intent
This LOI is used when one company intends to purchase another.
[Your Company Letterhead]
[Date]
[Acquiring Company Name]
[Acquiring Company Address]
**Subject: Letter of Intent for Acquisition of [Target Company Name]**
Dear [Contact Person Name],
This letter constitutes a non-binding letter of intent (the "Letter") outlining the preliminary understanding between [Acquiring Company Name] ("Acquirer") and [Target Company Name] ("Target") regarding the proposed acquisition of Target by Acquirer.
1. Proposed Transaction: Acquirer intends to acquire substantially all of the assets or equity of Target (the "Transaction").
2. Purchase Price: The proposed purchase price for the Transaction is [Dollar Amount], subject to adjustments for working capital, debt, and other customary adjustments.
3. Due Diligence: Acquirer will have the right to conduct due diligence on Target, including reviewing its financial statements, contracts, and other relevant information.
4. Exclusivity: Target agrees to negotiate exclusively with Acquirer for a period of [Number] days from the date of this Letter.
5. Closing: The closing of the Transaction is expected to occur on or before [Date], subject to the completion of due diligence, the negotiation and execution of definitive agreements, and the satisfaction of customary closing conditions.
6. Governing Law: This Letter shall be governed by and construed in accordance with the laws of [State/Jurisdiction].
This Letter is non-binding, except for the provisions regarding exclusivity and confidentiality. It is intended only as an expression of intent and shall not create any legally binding obligation on either party.
Please indicate your agreement to the terms of this Letter by signing below and returning a copy to us.
Sincerely,
[Your Name]
[Your Title]
Agreed to:
[Target Company Representative Name]
[Target Company Representative Title]
[Date]
2. Real Estate Purchase Letter of Intent
Used to express interest in buying a property.
[Your Name]
[Your Address]
[Your Phone Number]
[Your Email Address]
[Date]
[Seller's Name]
[Seller's Address]
**Subject: Letter of Intent to Purchase Real Estate – [Property Address]**
Dear [Seller's Name],
This letter is intended to express my/our interest in purchasing the property located at [Property Address] (the "Property").
1. Property Description: [Brief description of the property].
2. Purchase Price: The proposed purchase price is [Dollar Amount].
3. Earnest Money Deposit: A good faith deposit of [Dollar Amount] will be provided upon execution of a mutually acceptable Purchase Agreement.
4. Closing Date: The anticipated closing date is [Date].
5. Contingencies: This offer is contingent upon a satisfactory inspection of the Property and securing financing.
6. Due Diligence: Buyer will have [Number] days to conduct due diligence.
This Letter of Intent is non-binding, except for the confidentiality provision below, and is subject to the execution of a definitive Purchase Agreement.
Please confirm your acceptance of the terms outlined in this Letter of Intent by signing and returning a copy to me/us.
Sincerely,
[Your Name]
Agreed to:
[Seller's Name]
[Date]
3. Job Offer Letter of Intent
Precedes a formal job offer, outlining key terms.
[Company Letterhead]
[Date]
[Candidate Name]
[Candidate Address]
**Subject: Letter of Intent for Employment – [Job Title]**
Dear [Candidate Name],
We are pleased to offer you the position of [Job Title] at [Company Name]. This letter of intent outlines the preliminary terms of your employment.
1. Position: [Job Title]
2. Reporting To: [Manager's Title]
3. Start Date: [Start Date]
4. Salary: Your annual salary will be [Dollar Amount], paid [Frequency].
5. Benefits: You will be eligible for our standard benefits package, including health insurance, paid time off, and [Other Benefits]. Details of the benefits package will be provided upon acceptance of a formal offer of employment.
6. Contingencies: This offer is contingent upon the successful completion of a background check.
This letter of intent is not a binding contract of employment and is subject to the execution of a formal employment agreement.
Please indicate your acceptance of these preliminary terms by signing and returning a copy of this letter.
Sincerely,
[Hiring Manager Name]
[Hiring Manager Title]
Agreed to:
[Candidate Name]
[Date]
4. Partnership Letter of Intent
Used to establish the intentions of parties entering a business partnership.
[Date]
[Partner 1 Name]
[Partner 1 Address]
[Partner 2 Name]
[Partner 2 Address]
**Subject: Letter of Intent for Partnership Agreement**
Dear [Partner 2 Name],
This letter expresses the intent of [Partner 1 Name] and [Partner 2 Name] to form a partnership for the purpose of [Business Purpose].
1. Purpose of Partnership: [Detailed description of the business].
2. Capital Contributions: Partner 1 will contribute [Dollar Amount] and Partner 2 will contribute [Dollar Amount].
3. Profit and Loss Sharing: Profits and losses will be shared [Percentage] by Partner 1 and [Percentage] by Partner 2.
4. Responsibilities: [Outline of each partner's responsibilities].
5. Management: [Description of how the partnership will be managed].
This Letter of Intent is non-binding and is subject to the negotiation and execution of a definitive Partnership Agreement.
Please sign and return a copy of this letter to indicate your agreement with the above terms.
Sincerely,
[Partner 1 Name]
Agreed to:
[Partner 2 Name]
[Date]
5. Investment Letter of Intent
Used by investors to outline their intent to invest in a company.
[Investor Name]
[Investor Address]
[Date]
[Company Name]
[Company Address]
**Subject: Letter of Intent for Investment in [Company Name]**
Dear [Company Contact Person],
This letter outlines the intent of [Investor Name] ("Investor") to invest in [Company Name] ("Company").
1. Investment Amount: Investor intends to invest [Dollar Amount] in the Company.
2. Type of Investment: [Equity, Debt, Convertible Note].
3. Valuation: The pre-money valuation of the Company is estimated at [Dollar Amount].
4. Use of Funds: The funds will be used for [Specific purposes].
5. Due Diligence: Investor will have the right to conduct due diligence on the Company.
This Letter of Intent is non-binding, except for the confidentiality and exclusivity provisions below, and is subject to the negotiation and execution of definitive investment agreements.
Please indicate your agreement by signing and returning a copy of this letter.
Sincerely,
[Investor Name]
Agreed to:
[Company Representative Name]
[Date]
6. Merger Letter of Intent
A merger letter of intent (LOI) is a document outlining the preliminary agreement between two companies that intend to merge.
[Your Company Letterhead]
[Date]
[Target Company Name]
[Target Company Address]
**Subject: Letter of Intent for Proposed Merger between [Your Company Name] and [Target Company Name]**
Dear [Contact Person Name],
This letter of intent (the "Letter") outlines the preliminary understanding between [Your Company Name] ("Company A") and [Target Company Name] ("Company B") regarding a proposed merger transaction (the "Merger").
1. Proposed Transaction: Company A and Company B intend to merge, with [Surviving Entity Name] being the surviving entity.
2. Merger Consideration: The shareholders of Company B will receive [Specify consideration - e.g., shares of Company A, cash, or a combination] in exchange for their shares.
3. Due Diligence: Each party will have the right to conduct due diligence on the other party, including reviewing financial statements, contracts, and other relevant information.
4. Exclusivity: Each party agrees to negotiate exclusively with the other party for a period of [Number] days from the date of this Letter.
5. Closing: The closing of the Merger is expected to occur on or before [Date], subject to the completion of due diligence, the negotiation and execution of definitive agreements, and the satisfaction of customary closing conditions, including regulatory approvals.
6. Governing Law: This Letter shall be governed by and construed in accordance with the laws of [State/Jurisdiction].
This Letter is non-binding, except for the provisions regarding exclusivity and confidentiality. It is intended only as an expression of intent and shall not create any legally binding obligation on either party, except as specifically stated herein.
Please indicate your agreement to the terms of this Letter by signing below and returning a copy to us.
Sincerely,
[Your Name]
[Your Title]
Agreed to:
[Target Company Representative Name]
[Target Company Representative Title]
[Date]
7. Joint Venture Letter of Intent
Used to outline the initial terms of a joint venture agreement.
[Date]
[Company A Name]
[Company A Address]
[Company B Name]
[Company B Address]
**Subject: Letter of Intent for Joint Venture**
Dear [Contact Person at Company B],
This letter expresses the intent of [Company A Name] and [Company B Name] to form a joint venture for the purpose of [Business Purpose].
1. Purpose of Joint Venture: [Detailed description of the business venture].
2. Capital Contributions: Company A will contribute [Dollar Amount] and Company B will contribute [Dollar Amount].
3. Ownership: The joint venture will be owned [Percentage]% by Company A and [Percentage]% by Company B.
4. Management: [Description of how the joint venture will be managed].
5. Term: The term of the joint venture will be [Number] years.
This Letter of Intent is non-binding and is subject to the negotiation and execution of a definitive Joint Venture Agreement.
Please sign and return a copy of this letter to indicate your agreement with the above terms.
Sincerely,
[Representative of Company A]
Agreed to:
[Representative of Company B]
[Date]
8. Lease Agreement Letter of Intent
Used to express interest in leasing a property.
[Your Name/Company Name]
[Your Address]
[Your Phone Number]
[Your Email Address]
[Date]
[Landlord's Name/Property Management Company]
[Landlord's Address]
**Subject: Letter of Intent to Lease Property – [Property Address]**
Dear [Landlord's Name],
This letter is intended to express my/our interest in leasing the property located at [Property Address] (the "Property").
1. Property Description: [Brief description of the property].
2. Proposed Rent: The proposed monthly rent is [Dollar Amount].
3. Lease Term: The desired lease term is [Number] years.
4. Use of Property: The intended use of the property is [Description].
5. Security Deposit: [Dollar Amount] security deposit will be provided upon execution of a mutually acceptable Lease Agreement.
This Letter of Intent is non-binding, except for the confidentiality provision below, and is subject to the execution of a definitive Lease Agreement.
Please confirm your acceptance of the terms outlined in this Letter of Intent by signing and returning a copy to me/us.
Sincerely,
[Your Name/Company Representative]
Agreed to:
[Landlord/Property Manager]
[Date]
9. Service Agreement Letter of Intent
Used to outline the terms for a service to be provided.
[Date]
[Client Name]
[Client Address]
[Service Provider Name]
[Service Provider Address]
**Subject: Letter of Intent for Service Agreement – [Type of Service]**
Dear [Client Contact Person],
This letter outlines the intent of [Service Provider Name] to provide [Type of Service] to [Client Name].
1. Description of Services: [Detailed description of the services to be provided].
2. Term: The term of the agreement will be [Number] [Months/Years].
3. Compensation: The compensation for the services will be [Dollar Amount] [Per Hour/Per Project/etc.].
4. Payment Terms: [Description of payment terms].
This Letter of Intent is non-binding and is subject to the negotiation and execution of a definitive Service Agreement.
Please sign and return a copy of this letter to indicate your agreement with the above terms.
Sincerely,
[Representative of Service Provider]
Agreed to:
[Representative of Client]
[Date]
10. Scholarship Letter of Intent
Outlines a university’s intention to award a scholarship.
[University Letterhead]
[Date]
[Student Name]
[Student Address]
**Subject: Letter of Intent for [Scholarship Name] Scholarship**
Dear [Student Name],
We are pleased to inform you of our intention to award you the [Scholarship Name] scholarship for the [Academic Year].
1. Scholarship Amount: The scholarship will cover [Dollar Amount] of your tuition fees.
2. Duration: The scholarship is awarded for [Number] years, contingent upon maintaining a [GPA] GPA.
3. Requirements: [List any requirements, e.g., community service].
This Letter of Intent is non-binding and is subject to your acceptance of the terms and conditions of the scholarship and your continued enrollment at [University Name]. A formal scholarship agreement will be provided upon your acceptance.
Please indicate your acceptance of this offer by signing and returning a copy of this letter.
Sincerely,
[Scholarship Committee]
Agreed to:
[Student Name]
[Date]
11. Grant Application Letter of Intent
Expresses an organization’s intent to apply for a grant.
[Organization Letterhead]
[Date]
[Granting Organization Name]
[Granting Organization Address]
**Subject: Letter of Intent to Apply for [Grant Name] Grant**
Dear [Granting Organization Contact Person],
This letter serves as notification of [Organization Name]'s intent to submit a full application for the [Grant Name] grant.
1. Project Title: [Project Title]
2. Project Summary: [Brief summary of the project].
3. Amount Requested: We anticipate requesting [Dollar Amount] in grant funding.
4. Project Alignment: This project aligns with your organization’s mission to [State Mission].
This Letter of Intent is for informational purposes only and does not obligate [Organization Name] to submit a full application.
Sincerely,
[Executive Director Name]
[Executive Director Title]
12. Equipment Purchase Letter of Intent
Used to express intent to purchase equipment.
[Your Company Letterhead]
[Date]
[Seller Company Name]
[Seller Company Address]
**Subject: Letter of Intent to Purchase Equipment – [Description of Equipment]**
Dear [Seller Contact Person],
This letter expresses the intent of [Your Company Name] to purchase the following equipment from [Seller Company Name]: [Description of Equipment].
1. Equipment Description: [Detailed description of the equipment].
2. Quantity: [Number]
3. Proposed Purchase Price: The proposed purchase price is [Dollar Amount].
4. Payment Terms: [Description of payment terms].
5. Delivery: [Desired delivery date and location].
This Letter of Intent is non-binding, except for the confidentiality provision, and is subject to the negotiation and execution of a definitive Purchase Agreement.
Please confirm your acceptance of the terms outlined in this Letter of Intent by signing and returning a copy to us.
Sincerely,
[Your Name]
[Your Title]
Agreed to:
[Seller Company Representative Name]
[Seller Company Representative Title]
[Date]
Conclusion: Mastering the Letter of Intent
As demonstrated by these 12 diverse examples, the Letter of Intent is a flexible and valuable tool in various business and personal contexts. Whether it’s paving the way for a significant business acquisition, securing a promising job opportunity, or solidifying a partnership, the LOI sets the stage for future agreements. Remember, while generally non-binding, the LOI signifies a serious commitment and outlines the key terms of a potential deal.
The strength of an LOI lies in its clarity and precision. Clearly defining the purpose, scope, and key terms of the intended agreement is paramount. It’s also essential to explicitly state which sections, if any, are legally binding (e.g., confidentiality, exclusivity). Before finalizing any LOI, consulting with legal professionals is highly recommended to ensure your interests are protected and the document accurately reflects your intentions. Using these templates as a starting point and tailoring them to your specific needs, coupled with expert legal advice, will set you on the path to successful and mutually beneficial agreements. By understanding the nuances of LOIs and utilizing them strategically, you can navigate complex negotiations with confidence and achieve your desired outcomes.