Letter of Intent Template — Set Expectations Clearly from the Start
A Letter of Intent (LOI) helps two parties agree on the basics of a future deal — before the final legal documents are created. It’s a simple way to outline the key terms of an agreement and confirm that everyone is on the same page.
With LegalSimpli’s free LOI template, you can quickly create a professional document that helps move your transaction forward — whether it’s for a business sale, a new lease, a job offer, or any major agreement.
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Table of Contents
What Is a Letter of Intent?
A Letter of Intent is a written document that summarizes the basic terms and conditions of a proposed agreement between two parties. It’s usually non-binding, meaning it doesn’t commit either side to the final deal — but it does show serious interest and outlines what’s expected if the parties move forward.
- Buying or selling a business
- Leasing or purchasing property
- Entering into a new partnership
- Hiring someone for a senior position
- Planning a merger or joint venture
An LOI is not the final contract, but it’s a powerful way to start the process on the right foot. It helps avoid misunderstandings and sets a clear roadmap for what comes next.
When Do You Need a Letter of Intent?
You don’t always need a Letter of Intent — but it’s extremely helpful when you want to show that you’re serious about a deal without locking yourself into the final terms just yet.
An LOI can prevent miscommunication, reduce risk, and show professionalism — even in informal settings.
What Happens If You Don’t Use a Letter of Intent?
Skipping a Letter of Intent can lead to confusion, delays, and even legal disputes — especially if the parties assume different things about what was agreed upon.
Each side may think the other promised something different
There may be no clear record of negotiations or agreements
One party may walk away after significant effort or expense
You may lose financing or partners who need documentation to proceed
Disagreements later may be harder to resolve without something in writing
How to Fill Out a Letter of Intent
- Step 1: Add Contact Information
Include the names, addresses, and contact details of all involved parties. This keeps things official and identifies who is making the agreement.
- Step 2: Describe the Transaction or Agreement
Explain what you’re discussing — such as the sale of a business, a new lease, or an employment opportunity. Keep it simple and direct.
- Step 3: Outline the Key Terms
List important points such as:
- The price or compensation
- Timeline or deadlines
- Responsibilities of each party
- Conditions that must be met before a full agreement is signed
- Whether this LOI is binding or non-binding (most are non-binding)
- Step 4: Include Confidentiality or Exclusivity Clauses (if needed)
You can add a short clause to protect sensitive information or prevent the other party from negotiating with others during a certain time period.
- Step 5: Sign and Date the Document
Both parties should sign the LOI to confirm that they’ve read and agreed to the terms. Even non-binding LOIs should be signed to show mutual understanding.
With LegalSimpli, our guided template walks you through each of these sections so you can create a professional LOI in minutes.
Common Questions and Misunderstandings
- Is a Letter of Intent legally binding?
Most LOIs are non-binding, meaning they don’t force either party to follow through with the final agreement. However, some clauses within the LOI can be binding, such as confidentiality or exclusivity. Always read carefully and be clear on what is enforceable.
- Can I use an LOI instead of a full contract?
No. An LOI is not a substitute for a contract. It’s a planning document that helps both sides prepare to enter a more detailed agreement. It’s a first step — not the final one.
- Do I need a lawyer to write a Letter of Intent?
Not necessarily. If your transaction is simple and both parties are on the same page, you can use a well-made template. For large or high-stakes deals, you may want to have a lawyer review the document.
- Can I cancel an LOI after signing it?
Yes, in most cases. Because LOIs are generally non-binding, you can withdraw if things change — unless you’ve signed a clause that says otherwise (like an exclusivity clause with a time limit).
- Will the LOI hold up in court?
Only certain parts of the LOI (like binding clauses) may be enforceable in court. Courts typically treat the LOI as a good-faith step in negotiations — not a full contract. If you're relying on the LOI to do more, get legal advice.
Related Documents You May Need
Once you’ve completed your LOI and the parties are ready to move forward, you may need one of the following:
- Business Purchase Agreement
The final contract to sell or buy a business
- Commercial Lease Agreement
A detailed lease once property terms are finalized
- Employment Contract
For formalizing job offers after a hiring LOI
- Confidentiality Agreement (NDA)
If you didn’t include one in the LOI or need a separate document
- Partnership Agreement
To formalize a new business relationship
LegalSimpli offers ready-to-use, plain-English templates for each of these next steps. Complete your transaction smoothly with documents that fit together.
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