» Letter of Intent (LOI) Templates

Letter of Intent (LOI) Templates

A letter of intent (LOI) outlines a broad agreement that will be negotiated in good faith between two (2) parties. The letter expresses the “intent” of both parties that will be the basis of a formal contract. It is recommended to include a clause stating whether the document is binding or non-binding to avoid legal issues. If not, a court may deem any of the terms mentioned in the letter as binding and enforceable.

Table of Contents

By Type

What is a Letter of Intent?

A letter of intent is a document that is used commonly in the business community to have two (2) parties come to an agreement before a more advanced contract is written. In most cases, the letter of intent will be non-binding but will still have language that requires the parties to follow-up and negotiate in good faith. There is commonly an expiration date, such as thirty (30) days, by which time the parties must sign a binding written contract.

Is a Letter of Intent Legally Binding?

A letter of intent is legally binding if stated in the agreement. Otherwise, the enforcing party would be required to enforce the letter by submitting a complaint to the local court.

Binding vs Non-Binding

Binding – Enforceable document. The letter is treated the same as any other binding agreement.

Non-Binding – Unenforceable document. A symbolic letter that the parties agree, in principle, with the intention of a formal agreement to be written in “good faith”.

How Does a Letter of Intent Work?

A letter of intent is commonly the first agreement made to represent the desire for each party to come to an agreement for a purchase or a service provided. If the letter is binding, then it will act as the governing document between the parties.

Step 1 – Parties Negotiate

Before any agreement can be made the parties will be required to negotiate the terms. Once the main details are determined, such as the purchase price or payment for services, a letter of intent may be written.

Step 2 – Write the Letter of Intent

When enough details are agreed upon a letter of intent may be written. It’s important to include as many agreed-upon items as possible.

  • If the letter is binding, it is enforceable and should include the same terms as a standard agreement.
  • If the letter is non-binding, it should only include the main terms such as payment or compensation. Any additional items will be written in another agreement.

Step 3 – Completing the Transaction

Complete the transaction by either finalizing the transaction or converting the letter of intent into a binding agreement. Both parties have an obligation to continue the transaction, in “good-faith”, with one another.

How to Write a Letter of Intent

Download: Adobe PDF, Microsoft Word (.docx), or Open Document Text (.odt)

Step 1 – Acquire Your Letter Of Intent

Gain access to the Letter Of Intent Template or Form by reviewing the available formats labeled on the buttons captioning its preview or the links in this section. This letter can be edited as a PDF or word processing file (Word or ODT). You may download any (and all) of these versions of the template at your discretion. If you wish to present your intent to participate in a transaction (as a Buyer or a Seller) then proceed to “Step 2” directly below. If you intend to gain employment with this paperwork, then proceed to “Step 16.”

Step 2 – Supply The Return Address For This Correspondence

Open the first page of your downloaded Letter of Intent Template. The majority of letters that must be sent in an official capacity are expected to display a return address where responses may be directed by mail if necessary. This document has reserved several lines where the return address must be presented in the upper left-hand part of the letter. In the example below, we will display the Buyer’s information.
Step 3 – Document This Letter By Date

The second area requiring attention seeks to attach a specific calendar day as the first date when this letter becomes an active document between its Sender and its Recipient. Record the concerned calendar date using the two lines presented after the phrase “Effective Date.” 

 

Step 4 – Identify The Recipient Of This Letter

Now, the Recipient will also have to be named in the header. The next three available lines should be used for this presentation. These lines require the Recipient’s name on the first line, then his or her mailing address on the three lines that follow. Since we have identified the Buyer as the one with intent in our example, the Seller will be listed here.

 

Step 5 – Display The Topic Of This Letter

The next tool that should be presented as a matter of both protocol and good record-keeping is to attach a definitive subject. The blank line following the abbreviation “RE” (i.e. ‘regarding’) expects the general topic of this letter to be recorded. Once this topic is reported, this letter will have plainly stated the identity of its Sender, the formal date when it becomes an active document, the identity of its Recipient, and (with this last entry) the topic of discussion.   

 

Step 6 – Indicate The Durability Of This Letter

The first paragraph will contain two checkboxes that must be reviewed. You may only choose one since this sets a description as to whether this letter is “Binding” or “Non-Binding.” If this document is meant to carry the authority of obligating its Participants to its contents without further review and judgment by a court (because it would be automatically enforced in court), the “Binding” checkbox should be marked. If, however, this document is meant as a guideline for its Participants and would need the courts to review then decide whether compliance is warranted, then mark the “Non-Binding” checkbox. The example below will set this letter’s durability to be “Binding” and is not meant to require a court to inform either Party of whether the Buyer and Seller must comply or not – they will be expected to in this example because the first box is marked.

 

Step 7 – Introduce The Buyer

The Participants of the transaction that will be discussed must each be named. The first paragraph beneath the introduction (“I. The Buyer”) expects the full name of the individual or business entity that intends to submit a predetermined sum of cash to the Seller of tangible and non-tangible property to gain ownership of that property.  The next line of this statement will present two blank spaces. Report the building number, street, and unit number the Buyer uses in the address where all mail regarding this letter should be sent. This address must be continued with the city where it can be found entered on the second blank space.  The final blank space of this statement seeks the formally assigned zip code for the address above produced as its content. 

 

Step 8 – Name The Seller

The Seller, the current Owner of the concerned property, will also need his or her identity solidified. Thus, continue to the next statement (“II. The Seller”) then record the full name of the property’s Seller on the first empty line of this section. In the example below, the Sole Proprietor of a business will be the Seller involved. The second and third lines of the Seller article expects this entity’s full mailing address displayed as the building number/street/unit and city where mail should be addressed The last line of the Seller article requires the name of the State where the above address is located. 

 

Step 9 – Document The Details Of the Intended Payment

The third article of this letter seeks the details of the anticipated “Transaction.” Here the Buyer must plainly state how much money he or she intends to pay for the goods and/or services the Seller can provide. The two spaces that follow the term “…Pay The Seller The Amount Of” are set here to present this dollar amount. The first line, attached to the word “Dollars,” requires that you spell out the dollar amount that will be submitted to the Seller while the second space, in the parentheses, expects a numerical entry of this amount reported. 

This statement continues to the third empty line where an exact record of the Seller product or service the Buyer intends to purchase. Place a description of the property or service on the empty line following the phrase “…In Exchange For” and the parentheses label “(Goods/Services).” Notice, below, the Buyer is purchasing not only a vehicle but the rights to a business so both have been listed.

 

Step 10 – Further Define The Intended Payment Terms

The payment terms that rule over how it will be submitted will need some definition. The fourth article, bearing the “IV. Payment” title, contains three checkbox choices that cover the different options of how payment can be submitted. One of these will need to be chosen for this definition to be solidified for all the Parties involved. Three choices will be discussed here; “At A Later Date,” “Signing,” and “Other.” The first choice here “At A Later Date” should be marked if a specific payment date has been discussed or will be considered reasonable by both parties. If this is not the case, then do not mark this choice and proceed to the second option (“Signing”).  If a payment date will be set, you will need to name the payment date. Two options are provided within this choice and only one may be chosen. If a specific date will be named here, then mark the first one and supply the payment date on the lines provided. If the date of payment will be arranged in a formal agreement, then mark the second checkbox. In the example below the payment date will be set in a formal agreement. Both Parties may have determined that payment should be submitted at a “Signing.” If this letter’s signature date is the set date for payment, then mark the box labeled “Signing” and the first checkbox that follows (see below). Otherwise, you may mark the “Another Formal Agreement” checkbox. If the payment the Buyer will submit will not be done “At A Later Date” or a “Signing” then you must define how payment will be submitted directly. In such instances, mark the “Other” checkbox then record when payment will be submitted on the blank line after the word “Other.” 

 

Step 11 – Discuss The Deposit Status Associated With The Property Or Service To Be Purchased

Oftentimes, the Seller desires some assurance that the Buyer is serious. Especially, if there is a significant dollar amount expected in exchange. Thus, in section “V. Deposit” we will cover this topic. One of the two checkbox statements presented here will need to be chosen to define this status properly. If a “Deposit Is Required” you must mark the first checkbox to indicate this. In addition to marking the first checkbox, the dollar amount of the deposit must be written out on the line preceding the word “Dollars.”  Re-enter the deposit’s dollar amount numerically on the blank line in the parentheses.  After solidifying that a deposit is required, it will be important to define if it is a “Refundable” or “Non-Refundable” deposit. Only one choice may be made. Thus if the deposit is “Refundable” indicate this by checking either the “Refundable” checkbox and recording the terms of the deposit refund. To document that the Seller has no obligation to return the money even if the transaction causing this letter is canceled, check the “Non-Refundable” box. If the Seller does not require the security of a submitted deposit before the purchase completes then, select the box labeled “Deposit Not Required.” This will release the Buyer from the responsibility of providing any deposit amount but does not remove the remaining obligations of this agreement.

 

Step 12 – Indicate If Financing Is A Requirement Of This Transaction

Some purchases require financing. That is an additional source of money available to the Buyer for the purpose of making sure the Seller is paid. This is commonplace in most transactions where the asking price of the property (tangible or intangible) is high enough that the Seller requires this assurance for payment. If this transaction may only occur with the Buyer successfully obtaining financing, then mark the first checkbox labeled “Conditional Upon Financing.”This choice will require some framework for how financing may occur. For instance, the Seller may only require that the Buyer prove he or she has sought financing and will likely obtain it in the event he or she cannot meet future payments (i.e. a letter of financial support). In the example, below the Seller requires a letter of financial support from one of the entities listed on an attachment. If the Seller requires no such assurance, then you may mark the “Not Conditional Upon Financing.”

 

Step 13 – Display The Applicable Jurisdiction

This letter of intent may be binding or non-binding. Regardless of this status, the state that holds the “Governing Law” over this document must be defined. Produce its name on the blank space following the words “…Under The Laws By The State Of.”   

 

Step 14 – Obtain The Seller’s Signature As Acknowledgement Of The Intended Transaction

Now we have provided the definitions the articles in this letter required, it will be time to execute it by signature. This letter will have no legal grounding if it is unsigned. Thus, the Seller must locate the “Seller” signature section at the close of this letter, then sign his or her name on the “Seller’s Signature” line and provide the “Date” of the signature on the empty line to the right. Once Seller has signed and dated this letter, he or she must print his or her name on the “Print Name” line below. 

 

Step 15 – Deliver The Buyer’s Signature As Proof Of The Intent To Purchase

The “Buyer” signature section is the final section requiring attention. The intended Purchaser or Buyer of the Seller’s property or services must sign the “Buyer’s Signature” line and enter the current “Date” immediately after signing his or her name on the next line to the right.  After signing this paperwork, the Buyer should clarify the identity behind the signature by supplying the printed version of his or her name on the “Print Name” line. 

 

Step 16 – Locate The Third Page To Access The Employment Letter Of Intent

If you acquired this document by clicking on the “PDF,” “Word,” or “ODT” button on this page, then you must scroll down to the title “Letter Of Intent (Employment)” on the third page to utilize it.

 

Step 17 – Define The Job Seeker’s Contact Information

You will need to supply an up-to-date mailing address to this letter so that it is visible immediately upon review. The blank lines in the upper left supply an area where you may inform the potential Employer where responses should be mailed. The first of these lines seeks your name (as the job applicant) while the three that follow should be supplied with your mailing address.

Step 18 – Report The Applicable Date For This Later

Naturally, you will want the potential Employer to take this letter seriously and you will want this entity to know how recently you have sent this letter. Dating this document as being an active declaration of your intent upon a specific day will often contribute to both goals substantially. Therefore, the blank line labeled “Date” has been set just below your address so you may enter the current date for display. If desired, you may consider post-dating this letter to account for delivery.

Step 19 – Address The Potential Employer Directly

The next three available lines should be used to direct this correspondence. Record the Employer’s legal business name on the first of these lines, then the formal mailing address onto the next three empty lines. 

Step 20 – Declare The Topic Of This Letter

One of the first items that will be reviewed in this document will be its subject. This will aid the Recipient or Potential Employer in directing this letter to the right department. Thus, record the title of the position you intend to obtain after the abbreviation for the word ‘Regarding.” Seek out the blank line after “Re:” to properly record the desired job title. Bear in mind, that if you are responding to a job listing, the Employer may have already indicated what should be used as the subject line

Step 22 – Greet The Potential Employer

Generally, many would suggest making sure to address a specific Party within the concerned company. The word “Dear” is attached to a blank line where the Recipient of this correspondence should be named. If you do not know the full name of this letter’s Recipient, it is strongly recommended that you research the business entity to obtain it. Otherwise, you may use a generic greeting such as “Hiring Manager,” “Human Resources Manager, “Sir Or Madame,” etc.  Note: If the Recipient has a title (i.e. “Judge Smith,” “Doctor Jones,” etc.) make sure to include it properly here. 

Step 23 – Formally Introduce Yourself To The Employer

The first statement in this letter will need two items to supplement its language. The first of these is your name which must be entered on the blank line between the word “I” and the phrase “Am Writing This Letter Of Intent…” 

Step 24 – Document The Sought Position

The title of the position this letter concern is required on the second blank line. This may be the same item you recorded earlier as the topic. 

Step 25 – Present The Skills You Can Bring To The Position

This template will serve to house the information you wish delivered to the Employer. The second paragraph contains the language to set up a report on the skills you can bring to the position. This will require a little self-promotion that sticks to the facts. That is, do not embellish your abilities and do not mention any shortcomings. In the example below, any experience that would aid an administrative assistant in a school will be documented, including those that may not directly relate to the job yet remain valuable and relevant.

Step 26 – Give A Brief Summary Of Your Applicable Experience

The potential Employer will desire some basic proof of your skills. You can show this by listing the previous Employers, Volunteer Organizations, or Educational Facilities where you acquired the skills that will aid you in the sought position. Use the blank lines after the term “…Experiences At” to list the Employers or Volunteer Organizations where you obtained the skills above.

Step 27 – Dispense Your Contact Information

The Employer should be given a more immediate method to contact you than by mail. Two available spaces in the third paragraph will achieve this task once you complete them. Fill in a reliable phone number where you can be reached during the Employer’s work hours on the first line (after the phrase “…Contact Me By Phone At”) then record your email address on the second space. Make sure these are both well-monitored since an interested Interviewer may likely use one of these to initiate contact on behalf of the potential Employer.

 

Step 28 – Execute Your Intent By Signature

Now, review the information presented. If this is an accurate representation of your intent with the Recipient Employer, sign your name on the “Signature” line directly under the word “Sincerely.” 

Step 29 – Clarify Your Identity

Regardless of how often your name has been reported, it is simply a matter of protocol that you also print it below your signature. This removes any doubt as to the Signature Party’s identity. 


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