Letter of Intent (LOI) Template

Sender (proposing party): The individual or company initiating the LOI and proposing the terms. In a business purchase, this is typically the buyer. In a job or school application, this is the applicant.

Recipient (receiving party): The individual or company receiving the proposal and deciding whether to accept, counter, or decline. In a transaction context, this is typically the seller or the other business.

Authorized representative: The person signing on behalf of a company — usually an officer, managing partner, or authorized agent. Their title and authority to bind the organization should be clear.

Legal counsel (conditional): Not a party to the document, but often involved in reviewing the LOI before signing, particularly for mergers, acquisitions, or high-value real estate transactions.

Notary (conditional): A notary is not typically required for a letter of intent. However, some parties choose to have signatures notarized to add formality or to satisfy requirements in the subsequent formal agreement.

Date: Establishes when the LOI was issued and starts the clock on any deadlines, such as an exclusivity window or response deadline.

Sender information: Full legal name, address, and contact details of the party making the offer. If a company, include the entity name and type (e.g., LLC, Inc.).

Recipient information: Full legal name and address of the party receiving the LOI.

Statement of intent: A clear opening statement describing the purpose of the letter: what the sender is proposing and what kind of transaction or relationship is being contemplated.

Description of the subject matter: A specific description of what is being bought, sold, leased, partnered on, or agreed to. For real estate, this means the property address and relevant details. For a business purchase, this means the company name and what is included in the deal.

Proposed key terms: The material terms the sender is offering — price, payment structure, timeline, revenue split, equity stake, or other deal-specific terms depending on the transaction type.

Conditions: Any requirements that must be met before the deal can proceed — such as satisfactory due diligence, financing approval, regulatory clearance, or inspection results.

Exclusivity clause (conditional): A clause preventing the recipient from negotiating with other potential buyers or partners for a defined period. This is one of the provisions that can be legally binding even in an otherwise non-binding LOI.

Confidentiality clause (conditional): A commitment from both parties to keep the terms and existence of the LOI private. Like exclusivity, this clause is typically enforceable even if the rest of the LOI is not.

Non-binding statement: An explicit statement clarifying that the LOI does not create a binding obligation to complete the transaction, except for any clauses specifically identified as binding.

Governing law: The state whose laws will apply if a dispute arises about the LOI or the negotiation process.

Response deadline: The date by which the recipient must respond — accept, counter, or decline. A clear deadline prevents open-ended negotiations.

Signature block: Signature lines for both parties, including printed names, titles, and dates.

Non-binding: Describes a document or clause that expresses intention without creating a legal obligation to perform or complete the transaction.

Binding clause: A specific provision within an otherwise non-binding LOI that is enforceable, such as a confidentiality or exclusivity clause.

Exclusivity (no-shop clause): A commitment by the recipient not to negotiate with other potential buyers or partners for a defined period, giving the sender time to complete due diligence.

Due diligence: The process of investigating and verifying the other party's information: financial records, legal standing, assets, liabilities, before committing to a transaction.

Term sheet: A document similar to a letter of intent, often used in investment and financing transactions, that outlines the proposed economic and governance terms of a deal.

Memorandum of understanding (MOU): A document similar to an LOI, but typically used between organizations to formalize a shared understanding of goals or collaboration without creating a binding contract.

Governing law clause: A provision specifying which state's law will interpret the agreement and handle disputes.

Rescission: The cancellation of an agreement before it is executed, returning both parties to their original positions.

Good faith: The expectation that both parties will negotiate and act honestly and fairly, without attempting to mislead or take unfair advantage of the other party.

Counterparty: The other party to an agreement — the person or entity on the opposite side of the transaction.