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 is a non-binding agreement that establishes the key terms of a potential deal before a formal contract is drawn up. LOIs are used in various scenarios, from business mergers and acquisitions to real estate transactions and employment offers. Understanding the structure and content of an LOI is crucial for ensuring a smooth and efficient negotiation process. This article provides 18 diverse LOI samples to help you understand how to draft a letter that effectively communicates your intentions and protects your interests.
Before diving into the sample letters, it’s important to remember that an LOI is a strategic tool. While generally non-binding (certain clauses like confidentiality or exclusivity may be legally binding), it sets the stage for future negotiations and helps avoid misunderstandings. Each LOI should be tailored to the specific situation, clearly stating the parties involved, the subject matter of the agreement, and the proposed terms. Careful consideration should be given to which elements are binding versus non-binding to avoid later disputes. Consulting with legal counsel is always recommended before drafting or signing an LOI.
Below are 18 sample LOIs designed to cover a wide range of situations. Each sample demonstrates specific language and focuses on different areas of intent. Remember, these are templates and must be adapted to reflect the specific details of your situation. Before using any sample, consult with a legal professional to ensure it meets your specific needs and complies with applicable laws.
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Sample 1: Business Acquisition LOI
[Your Company Letterhead]
[Date]
[Target Company Name]
[Target Company Address]Subject: Letter of Intent – Acquisition of [Target Company Name]
Dear [Contact Person],
This letter constitutes a non-binding letter of intent whereby [Your Company Name] (“Buyer”) expresses its interest in acquiring all outstanding shares of [Target Company Name] (“Seller”). The proposed purchase price is $[Amount], subject to due diligence and final agreement.
Sincerely,
[Your Name]
[Your Title] -
Sample 2: Real Estate Purchase LOI
[Your Name/Company Name]
[Your Address]
[Date]
[Seller Name/Company Name]
[Seller Address]Subject: Letter of Intent – Purchase of Real Property at [Property Address]
Dear [Seller Name],
This letter confirms my/our intention to purchase the property located at [Property Address] for the price of $[Amount]. This offer is subject to a satisfactory inspection and appraisal.
Sincerely,
[Your Name] -
Sample 3: Employment Offer LOI
[Company Letterhead]
[Date]
[Candidate Name]
[Candidate Address]Subject: Letter of Intent – Offer of Employment
Dear [Candidate Name],
We are pleased to offer you the position of [Job Title] with [Company Name]. Your starting salary will be $[Amount] per year, and your start date will be [Date]. This offer is contingent upon a background check.
Sincerely,
[Hiring Manager Name]
[Hiring Manager Title] -
Sample 4: Partnership LOI
[Your Company Letterhead]
[Date]
[Partner Company Name]
[Partner Company Address]Subject: Letter of Intent – Partnership Agreement
Dear [Contact Person],
This letter expresses our interest in forming a partnership with [Partner Company Name] to [Project Description]. We propose a profit-sharing ratio of [Percentage] for each party.
Sincerely,
[Your Name]
[Your Title] -
Sample 5: Joint Venture LOI
[Your Company Letterhead]
[Date]
[Venture Company Name]
[Venture Company Address]Subject: Letter of Intent – Joint Venture for [Project]
Dear [Contact Person],
We intend to establish a joint venture with [Venture Company Name] for the purpose of [Project]. We propose a capital contribution of $[Amount] each.
Sincerely,
[Your Name]
[Your Title] -
Sample 6: Consulting Services LOI
[Your Company Letterhead]
[Date]
[Consultant Name]
[Consultant Address]Subject: Letter of Intent – Consulting Services Agreement
Dear [Consultant Name],
We wish to engage your services as a consultant for [Project]. Our proposed rate is $[Amount] per hour.
Sincerely,
[Your Name]
[Your Title] -
Sample 7: Lease Agreement LOI
[Your Name/Company Name]
[Date]
[Landlord Name/Company Name]
[Landlord Address]Subject: Letter of Intent – Lease of Property at [Address]
Dear [Landlord Name],
This letter expresses our interest in leasing the property located at [Address]. We are willing to pay $[Amount] per month in rent.
Sincerely,
[Your Name] -
Sample 8: Loan Agreement LOI
[Your Name/Company Name]
[Date]
[Lender Name/Company Name]
[Lender Address]Subject: Letter of Intent – Loan for [Purpose]
Dear [Lender Name],
We intend to borrow $[Amount] from your institution for the purpose of [Purpose]. We propose an interest rate of [Percentage].
Sincerely,
[Your Name] -
Sample 9: Supply Agreement LOI
[Your Company Letterhead]
[Date]
[Supplier Company Name]
[Supplier Company Address]Subject: Letter of Intent – Supply Agreement
Dear [Contact Person],
We intend to purchase [Product] from [Supplier Company Name] at a price of $[Amount] per unit.
Sincerely,
[Your Name]
[Your Title] -
Sample 10: Distribution Agreement LOI
[Your Company Letterhead]
[Date]
[Distributor Company Name]
[Distributor Company Address]Subject: Letter of Intent – Distribution Agreement for [Product]
Dear [Contact Person],
We intend to appoint [Distributor Company Name] as our exclusive distributor for [Product] in [Region].
Sincerely,
[Your Name]
[Your Title] -
Sample 11: Confidentiality Agreement LOI (Non-Binding Except for Confidentiality Clause)
[Your Company Letterhead]
[Date]
[Receiving Party Name]
[Receiving Party Address]Subject: Letter of Intent – Confidentiality Agreement
Dear [Contact Person],
This letter expresses our intention to disclose confidential information related to [Project] to [Receiving Party Name]. This LOI is non-binding *except* for the clause regarding the confidentiality of the disclosed information.
Sincerely,
[Your Name]
[Your Title] -
Sample 12: Research and Development LOI
[Your Company Letterhead]
[Date]
[Partnering Institution Name]
[Partnering Institution Address]Subject: Letter of Intent – Research and Development Collaboration
Dear [Contact Person],
We are interested in collaborating with [Partnering Institution Name] on a research and development project focused on [Research Area].
Sincerely,
[Your Name]
[Your Title] -
Sample 13: Franchise Agreement LOI
[Franchisor Company Letterhead]
[Date]
[Potential Franchisee Name]
[Potential Franchisee Address]Subject: Letter of Intent – Franchise Agreement for [Franchise Name]
Dear [Potential Franchisee Name],
We are pleased to offer you the opportunity to become a franchisee for [Franchise Name] in [Location].
Sincerely,
[Franchisor Representative Name]
[Franchisor Representative Title] -
Sample 14: Technology Licensing LOI
[Licensor Company Letterhead]
[Date]
[Licensee Company Name]
[Licensee Company Address]Subject: Letter of Intent – Technology Licensing Agreement
Dear [Contact Person],
We intend to license our proprietary technology related to [Technology Description] to [Licensee Company Name].
Sincerely,
[Your Name]
[Your Title] -
Sample 15: Investment Agreement LOI
[Investor Name/Company Name]
[Date]
[Target Company Name]
[Target Company Address]Subject: Letter of Intent – Investment in [Target Company Name]
Dear [Contact Person],
We are interested in investing $[Amount] in [Target Company Name] in exchange for [Equity Percentage].
Sincerely,
[Your Name] -
Sample 16: Mergers and Acquisitions LOI (Short Form)
[Acquirer Company Letterhead]
[Date]
[Target Company Name]
[Target Company Address]Subject: Letter of Intent – Potential Merger
Dear [Contact Person],
This letter outlines our initial interest in exploring a merger between [Acquirer Company Name] and [Target Company Name].
Sincerely,
[Your Name]
[Your Title] -
Sample 17: Purchase Order LOI (For Large-Scale Procurement)
[Buyer Company Letterhead]
[Date]
[Supplier Company Name]
[Supplier Company Address]Subject: Letter of Intent – Future Purchase Orders
Dear [Contact Person],
We anticipate placing significant purchase orders for [Products] from [Supplier Company Name] over the next [Time Period], subject to competitive pricing and quality.
Sincerely,
[Your Name]
[Your Title] -
Sample 18: Service Agreement LOI
[Your Company Letterhead]
[Date]
[Service Provider Company Name]
[Service Provider Company Address]Subject: Letter of Intent – Service Agreement
Dear [Contact Person],
We intend to engage [Service Provider Company Name] to provide [Services] at a rate of $[Amount] per [Unit of Time].
Sincerely,
[Your Name]
[Your Title]
Conclusion
These 18 samples provide a valuable starting point for drafting your own Letter of Intent. Remember to tailor each sample to your specific situation, consult with legal counsel to ensure its accuracy and enforceability, and carefully consider which provisions should be binding or non-binding. A well-drafted LOI can significantly contribute to a successful negotiation and a positive outcome for all parties involved.
