Letters of intent are a type of business proposal. Even though they have similar sections as formal agreements, they're not the same as contracts and aren't usually legally binding. Instead, you can use a letter of intent as the first step in negotiating a business contract.
Taking the step of sending a letter of intent shows that you're serious about making an offer. If the other party is also interested, it may respond with a preliminary agreement of its own.
Letters of intent can be extremely helpful in negotiations. They give both parties a clear idea of what details are key to reaching an agreement. That way, everyone is on the same page as the process continues. Instead of having to schedule countless phone calls and meetings, it's possible to take care of most of the details electronically. There are fewer misunderstandings with written proposals as well.
You can find many letters of intent for business situations, including LOIs for purchasing agreements, service contracts, and mergers and acquisitions. Letters of intent are also common in job applications and university applications. Each type of letter of intent contains different information, such as sections for job history or educational background, so it's important to select a template that meets your specific needs.
