Confidentiality & Legal

Free Letter of Intent Template (PDF)

A letter of intent (LOI) is a short document that sets out the main terms two parties intend to negotiate for a deal, such as buying a business, leasing space, or forming a partnership, before they sign a full contract. It's mostly non-binding, with a few specific provisions that are binding.

When to use it

Use a letter of intent when you've agreed on the big points of a deal and want them in writing before spending time and money on due diligence and a full contract. It's common for buying or selling a small business, commercial leases, and partnerships. The most important thing in an LOI is being clear about which parts are binding: this template makes everything non-binding except exclusivity, confidentiality, costs, and how the letter ends.

What's typically included

• Parties and date
• Description of the proposed transaction
• Price and key commercial terms
• Due diligence access and period
• Conditions to closing
• Timeline toward a definitive agreement
• Optional exclusivity (no-shop) period
• Each party pays its own costs
• A clear list of the only binding provisions
• Confidentiality
• Ending the letter and governing law
• Signature blocks for both parties

How to fill it in

• Describe the deal clearly but briefly. An LOI is a summary, not the final contract, so keep detailed terms for the definitive agreement.
• Decide whether you need exclusivity. A buyer usually wants it so the seller doesn't shop the deal during due diligence; a seller may want it short.
• Leave Section 8 as it is unless you deliberately want more provisions to be binding. Courts have enforced LOIs that weren't clear about this.
• For a significant deal, have a lawyer review the LOI before signing: its terms tend to anchor the final contract.

This template is a general starting point, not legal advice — customize it and have it reviewed for your situation.

Frequently asked questions

Is a letter of intent legally binding?

It depends on how it's written. Most LOIs are mostly non-binding, but specific provisions, like confidentiality and exclusivity, can be binding, and a court may treat an unclear LOI as a contract. This template states exactly which sections bind the parties and that nothing else obliges either side to close the deal.

What's the difference between a letter of intent and a contract?

A contract binds both parties to complete the deal on its terms. A letter of intent records the terms they intend to negotiate, so they can do due diligence and draft the contract with a shared starting point. Either party can usually walk away before the contract is signed.

What is an exclusivity or no-shop clause?

It's a binding promise, usually by the seller, not to negotiate with anyone else for a set period while the buyer does due diligence. It protects the buyer's time and costs. Keep the period realistic, often 30 to 90 days.

Can a letter of intent be signed electronically?

Yes. Under the U.S. ESIGN Act and state UETA laws, an e-signed LOI is as valid as a paper one, including its binding provisions.