Letter of Intent

A non-binding or partially binding document that outlines the preliminary agreement and intentions of two parties before a formal contract is negotiated and signed, signalling serious interest and establishing the key terms to be finalised.

A letter of intent creates clarity and commitment without the time cost of full contract negotiation. It is commonly used in acquisitions, partnerships, and investment discussions to establish alignment before expensive legal drafting begins.

A founder in acquisition discussions receives a letter of intent from a potential buyer outlining the proposed purchase price, deal structure, exclusivity period, and key conditions. Signing the LOI does not commit her legally to sell but signals both parties are serious, triggering the due diligence process.