Letter of Intent (LOI)

A Letter of Intent (LOI) is a document which outlines the terms of an agreement between two or more parties before the agreement is finalised. It is a non-binding agreement to enter into negotiations.

For example, Company A may send a Letter of Intent to Company B expressing their interest in acquiring Company B's assets. The LOI will outline the basic terms and conditions of the proposed acquisition, such as the purchase price, timeline and any other details that both parties agree upon.

In essence, an LOI is a starting point for negotiations and is not a legally binding contract. Both parties must reach an agreement before any contract can be signed.