A letter of intent (LOI) is referred to as an essential document which delineates the contract between two or more parties. A letter of intent is made for several agreements such as Share Purchase Agreements, Joint Project Agreements, Asset Purchase Agreements and many others.

Purpose of Letter of Intent

It clarifies the chief and important points of any transaction or deal that takes place between two or more parties so as to avoid any future complications or conflicts.

It provides comprehensive information regarding the agreement terms and conditions, procedure, number of people involved etc. it also informs about any kind of negotiation that is going on between the parties for their future joint-ventures.

If a deal gets cancelled during negotiation or concession then letter of intent provides in-depth detail regarding the reason of cancellation of project. It helps in avoiding any kind of future disputes among the people involved.

Things to Consider:

Letter of intent is a written legal contract which do not binds both the parties but state two parties’ discussion on a joint venture. However, several letter of intent states about binding of two parties for working on a similar project. It includes a contract to confer in good faith, non-disclosure agreements or no-shop provisions to bargain etc. A letter of intent (LOI) is referred to a document that conveys about latest plans and procedures of companies and organizations. For instant a leading company is planning to purchase a plant, then letter of intent will be prepared stating the date of purchase of plant, implementation or expansion of plant, recruitment of employees and other.

Important tips to write a letter of intent (LOI)

Enlisted are few essential tips or guidelines of writing letter of intent.

The foremost step is to enquire about the concerned person’s name and address. Do not address the letter to ‘Head of the department’ or any other person as it may create problem for you. You can call the organization for concerned person’s name, contact number and address.

Letter of intent is a confidential letter which should be written in a professional way. Do not use casual language and maintain an appropriate business format. It is recommended to use font type such as Times roman or Arial and keep the font size short.

The first paragraph of letter of intent includes your general introduction. You can write about your place of birth, achievements, highest qualifications, job profiles and several other things.

You should know the purpose for writing a letter of intent. For example you are writing a letter to the ‘head of the basket ball team’ of your school. Then you can write about how you came to know about the team, your passion for basketball or about other previous achievements.

In the last paragraph you should request for feedback or response. Do not forget to mention your entire details including contact number, address, name, qualification etc.

It is important to finish the letter writing ‘sincerely yours’ and signatures after the last paragraph. Write briefly and keep the length of paragraph short.

Read the letter again and check for any grammatical mistake thereby correct it as it gives a wrong impression to the receivers. Make changes to the letter if required.

A person should keep one copy of letter of intent with him or her incase needed afterwards.

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