Quick Definition

A Letter of Intent (LOI) is a document outlining the preliminary agreements between two parties before a formal contract is finalized. It is commonly used in real estate and business transactions to clarify the terms of a deal.

Examples

• 1A real estate developer sends an LOI to a landowner expressing the intent to purchase a parcel of land, including proposed purchase price and terms.
• 2A business owner issues an LOI to a potential partner to outline the structure of a joint venture before drafting a detailed partnership agreement.
• 3An investor sends an LOI to a startup company indicating the terms under which they would be willing to invest, including the amount of investment and the equity stake sought.

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