Letter of intent

This article is general information, not legal advice. A letter of intent can carry legal weight depending on how it is written, so for a high-value or complex deal, have a lawyer review it before you sign.

What a letter of intent is

A letter of intent, often shortened to LOI, is a written statement that you intend to enter into an agreement or take a specific action. It outlines the main terms the parties have discussed and shows that both sides are serious enough to put their understanding on paper. It usually comes before the final, detailed contract, and it helps everyone confirm they are aligned before spending time and money on the full agreement.

Think of it as a bridge between a conversation and a contract. The talking has produced a rough shape of a deal, and the letter of intent captures that shape so the parties can move forward with confidence. It is common in business purchases, real estate, job offers, and applications to schools or programs.

When to use a letter of intent

A letter of intent fits many situations where you want to signal commitment before a formal contract. Common uses include:

• Business deals. Buying a company, forming a partnership, or starting a large purchase, where the LOI outlines price and key terms before the detailed contract.
• Real estate. A buyer or tenant states the terms they propose for a property before drafting the full purchase or lease agreement.
• Employment. An employer or candidate confirms intent to hire or be hired, listing role, start date, and main terms ahead of a formal offer.
• Education and programs. An applicant states their intent to enroll, apply, or accept a place, and explains why they are a strong fit.
• Grants and proposals. An organization signals it plans to submit a full proposal before doing the detailed work.

In each case, the letter narrows the gap between interest and commitment, so both sides know where they stand.

Is a letter of intent binding?

This is the most important thing to understand about an LOI, and the answer is: it depends on how it is written. Some letters of intent are meant to be non-binding, a good-faith outline that neither side is legally required to follow. Others contain binding parts, such as a promise to keep negotiations confidential or to deal exclusively with the other party for a set time. Many LOIs are a mix, with most terms non-binding but a few specific clauses binding.

Because of this, the wording matters a great deal. A well-drafted letter of intent says clearly which parts are binding and which are not. If you want the whole letter to be non-binding, say so plainly. If a lawyer is involved in a large deal, this is exactly the kind of language they will focus on.

What to include in a letter of intent

A good letter of intent is clear and specific without being as long as a contract. Include these parts:

• The date and the parties. Who is writing the letter and who it is addressed to.
• A clear statement of intent. One or two sentences that say what you intend to do.
• The main terms. The key points you have agreed on so far, such as price, role, timeline, or scope.
• Conditions. What still needs to happen, such as due diligence, financing, approvals, or a final contract.
• Binding vs non-binding language. A clear note about which parts, if any, are legally binding.
• A timeframe. How long the intent stands, or a date by which the parties expect to sign a final agreement.
• A closing and signature. A polite close, your signature, and a space for the other party to sign if they agree.

Free letter of intent template

Copy the template below, or open it in the fill tool and type your details onto the page. Replace every bracketed prompt with your own words.

[Your name]
[Your address]
[Email]  [Phone]
[Date]

[Recipient name]
[Company or organization]
[Address]

Re: Letter of Intent regarding [subject of the deal]

Dear [Recipient name],

This letter sets out my intent to [clearly state what you intend to do,
such as purchase, lease, join, or enroll]. It reflects our discussions
and the main terms we have agreed so far.

1. Purpose
   [One or two sentences describing the deal or action.]

2. Main terms
   - [Term 1, such as price or amount]
   - [Term 2, such as timeline or start date]
   - [Term 3, such as scope or responsibilities]

3. Conditions
   This intent is subject to [due diligence, financing, approvals, and
   a final written agreement], to be completed by [date].

4. Binding effect
   Except for [the confidentiality and exclusivity sections], this letter
   is a non-binding expression of intent and does not create a contract.

5. Timeframe
   The parties intend to sign a final agreement by [date]. This letter
   remains valid until that date unless extended in writing.

Thank you for your time. Please sign below to confirm we share this intent.

Sincerely,
[Your signature]
[Your printed name]

Accepted and agreed:
[Recipient signature] ____________________   Date: ____________

How to write a letter of intent step by step

1. Open the template in the fill tool. Copy the text above, or load it into the fill a PDF tool to type your details directly onto the page. You can also start from a form in the templates library.
2. Add the headers. Fill in your details, the date, and the recipient's name and address. Address a real person where you can.
3. State your intent clearly. In the first paragraph, say plainly what you intend to do. Avoid vague language, since the whole point is to be clear.
4. List the main terms. Include the key points you have agreed, such as price, timeline, or scope. Specific terms prevent misunderstandings later.
5. Set the conditions. Note what still has to happen before a final deal, such as financing or approvals.
6. Mark what is binding. State whether the letter is binding, non-binding, or a mix, so there is no confusion about its effect.
7. Add a timeframe. Give a date by which the parties expect to sign a final agreement.
8. Sign and download. Add your signature with the sign a PDF tool, leave a space for the recipient, and download a clean PDF.

Letter of intent vs a contract

A letter of intent and a contract are not the same thing, and mixing them up can cause trouble. A contract is a final, binding agreement that both sides are legally required to follow. A letter of intent usually comes earlier and is often non-binding, an outline of what the parties expect to agree once the details are worked out. The LOI moves the deal forward and builds trust, but in most cases it is the later contract that actually locks in the obligations. If you need a full agreement instead, our contract template guide covers what a binding contract should include.

Letter of intent vs letter of interest

These two sound alike but do different jobs. A letter of intent states that you plan to take a specific action, such as buy a business or accept a place in a program. A letter of interest, sometimes called a letter of inquiry, is softer. It expresses that you are interested in an opportunity, such as a job that may not be posted, without committing to anything specific. If you are exploring rather than committing, a letter of interest fits better. If you are ready to signal real intent, use a letter of intent.

Tips for a strong letter of intent

A few habits make an LOI clearer and more effective. Keep it to one or two pages, since a letter of intent is a summary, not the full contract. Be specific about the terms you have agreed and honest about what is still open. State plainly whether the letter is binding, because leaving that unclear is the most common way an LOI causes a dispute. Use full dates so nobody reads a deadline two ways. And give both sides a signed copy, so there is one shared version of the understanding rather than two.

Fill out and store your letter of intent online

You do not have to fight with a word processor to produce a clean letter of intent. Open our fill a PDF tool, add the template, type your details into the right spots, and download a print-ready PDF. Because everything runs in your browser, a letter with private deal terms stays on your own device rather than being uploaded to a server. When it is ready, add signatures with the sign a PDF tool, and browse the templates library for the related agreements you may need once the deal moves ahead.