A letter of intent (LOI) is a preliminary agreement that outlines the basic terms of a proposed deal between parties, serving as a foundation for further negotiations. Commonly used in mergers and acquisitions, real estate transactions, government grants, and job or academic applications, an LOI helps set expectations before a formal contract is drafted. While nonbinding, it clarifies intentions and opens the door for more detailed discussions. Our collection of LOI templates covers various scenarios, from business transactions to personal commitments, ensuring you have a suitable format for your needs.
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A letter of intent, abbreviated LOI, is a written commitment by one party to do business with another. It outlines the fundamental terms of the prospective agreement before a more comprehensive, detailed contract. This document is typically used in mergers and acquisitions (M&A), real estate deals, government grant requests, and job and academic applications. It sets precedence for further negotiation and a more formal agreement. Note that the LOI is nonbinding, and the terms outlined can be countered.
Letters of intent are used in business and non-business circumstances where two parties must formalize their intent to work together or strike a deal. With this in mind, we have provided letter of intent templates suited for different use cases, including construction project deals, intent to marry, grant applications, promotions, job applications, purchase of a business, intent to hire, real estate transactions, and other scenarios.
The content of the LOI depends on the applicable terms of a transaction and negotiations between the parties involved. Therefore, it is pertinent to understand the different elements you should include in the letter in various scenarios. Most common types of letter of intent templates include the following;
This template outlines the services and applicable terms in a construction project. This is because construction projects can be complex, and thus, the contractor and client must clarify the services to be provided beforehand. With this template, you can fill in the sender’s and recipient’s details in the header before specifying the client and contractor in the respective placeholders. These are followed by the following;
The template prompts you to specify the location, known as the ‘project site,’ and the exact value of its total cost, known as the ‘contract price.’ You should then indicate the commencement and completion dates. While this is not the ultimate schedule, it offers a timeline for planning. You should also define the scope of services to be provided by the contractor. The fundamentals of the agreement should be provided in this section, and the finer details will specified in the final contract.
A letter of intent is also suited for specifying the financial terms of the agreement, including payment (upon completion, in progress payments, and any other), deposit, and financing. You must clarify the number of days after the completion that payment must be made. If there is a payment schedule for in-progress payments, ensure that it is broken down in this section. The client gives a deposit as a monetary commitment, offering reassurance to the contractor.
The parties section is meant to provide a statement of declaration that the document is not legally binding, and both parties pledge to negotiate project specifications when creating a definitive construction agreement. Therefore, even though the parties are not bound to the terms of the LOI, they are bound to the negotiation process and uphold confidentiality. The governing law indicates the jurisdiction under which the LOI will be enforced and thus provides a clear direction on which laws and regulations will be used to resolve misunderstandings and negotiate legally mandated clauses. Lastly, the LOI must be signed to confirm that parties consent to the contents of the document.
This template is suited for organizations such as non-profits that want to send letters of intent to prospective sponsors indicating they want to seek a certain amount for a project. It begins with identifying the organization, its type, mission, intent, grantor’s name, project name, and goals. Other key sections include;
Project Overview – This section defines the objectives of the project, the problem being addressed, the expected impact, the target population, and the geographic location the project will serve. This section is meant to introduce the reader to what the project entails and capture the grantor’s interest.
Objective and goals – Use this section to define the project deliverables and show that the project has a substantial positive impact on the community.
Organization’s qualifications – Grantors want to finance organizations that fit their criteria and are credible in the respective industries. This template section is an opportunity to present information that will serve those two purposes by highlighting experience, awards, recognition, endorsements, and successes.
Funding request and utilization plan – This template section specifies the amount being requested and an overview of how the money will be used. It shows your planning capabilities and readiness to be accountable.
Sustainability and long-term impact – In this section, discuss the project’s long-term impact. You can discuss future funding, partnerships, or revenue-generating activities emanating from the project. This is an excellent way of demonstrating how impactful the project would be.
Finally, the template prompts you to conclude the LOI by reiterating key points to create a long-lasting impression on the grantor’s mind. Also, provide your contact information to facilitate correspondence and communication with the grantor.
