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A letter of intent (LOI) is a kind of document which outlines the terms of an agreement which is executed between two or more parties prior to the finalization of the legal agreement. A letter of intent is not considered as a contract and therefore it cannot be legally enforced. It reflects the commitment made by one party to another party. Before the drafting of the full contract, it is used for transaction clarification between the parties. It basically declares partnership or negotiation and mutual understanding among the parties involved. It is also referred as a LOI. It shows the intention of one party in relation to another.
These types of documents can be prepared in a variety of situations such as at the time of business negotiations which will define the intention of purchase of real estate or which will also give the indication of intent to accept a formal offer. A letter of intent is mainly used as an initial proposal to the other party in business. The initial proposal may be concerned with purchases, or mergers or acquisitions. It gives clarification on points of a deal but it is not legally binding.
A properly drafted Letter of Intent (LOI) reflects that the parties are serious taking purchase or sale. We can help you in making a LOI for purchasing an entire company or part of a company.
Following below mentioned things must be considered:
In the following situations it is required:
It is a bit confusing to understand what a Letter of Intent is? And when it is required?
Mainly, a letter of intent shows that parties are serious taking purchase and it also helps to stop another party to entertain other offers. We can provide you a template of Letter of Intent which will be suitable in all the states of India.
LOI is also named as Memorandum of Understanding, Term Sheet, and Pre-contract.
One must have certain information to draft a letter of intent.
Here, what you’ll require:
After submission of the above-mentioned information with us, the rest of the information is automatically filled by our professionals.
intent is not legally binding. It is a type of document which is a pre-contract. It helps in securing funding and also to prove the business value. In case of any fraud committed by the other party, the financial damage may be incurred by the company. Usually, the court often makes decisions on the basis of the implied intent is expressed in the letter of Intent.
We can help you in connecting with a lawyer for additional assistance or for the review of any document.
Above mentioned documents are almost similar and these documents are often used interchangeably. However, these are a bit different from each other. These types of documents are often used for the same purpose.
They all have the same purpose which reflects the intention of the parties involved in an agreement.
They are usually considered as “non-binding” unless it is enforceable by the law.
Read our article:What are the Steps for Contractor Agreement