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Free Letter of Intent Template

Pick the kind of deal, fill in the parties and the terms you have agreed, and the letter lays itself out as you type, with a section that says plainly which parts bind and which do not. Print it, save a PDF or copy it into an email. For business deals only: not a job, school or grant letter.

What goes in a letter of intent

  • Parties and date

    Who is writing to whom: both companies, the people who will sign, their titles and addresses, and the date of the letter.

  • Purpose

    One short paragraph on the deal you have in mind: what is being bought, leased or built together, and why.

  • Key terms

    The points agreed so far: price, quantity, term, timeline, payment. Leave out what is still open, or write that it is still to be agreed.

  • Conditions

    What has to happen before a final contract: due diligence, a site inspection, financing, board approval, a sample order passing a quality check.

  • Exclusivity and confidentiality

    Optional promises that usually do bind: not to negotiate with anyone else for a set number of days, and to keep what you learn private.

  • Binding effect and signatures

    A plain statement of which sections bind and that the rest does not, a date the offer lapses, and room for both sides to sign.

Is a letter of intent binding?

Usually not, and that is the point. A letter of intent records where the talks stand so both sides can spend time and money on inspections, due diligence and lawyers before the contract. McDonald Hopkins, a US law firm, describes a properly drafted LOI as one in which none of the provisions are legally binding "other than certain provisions such as confidentiality and exclusivity".

The title does not decide it; the wording does. The same firm notes that an LOI can be treated as binding when it contains all of the material terms and does not plan a later, definitive agreement. The University of Toronto's legal office makes the point about memorandums of understanding: if the parties meant to be bound and the terms are clear enough, the name of the document is irrelevant.

So say it in so many words. This template writes a binding-effect section from your switches: confidentiality and exclusivity bind if you turn them on, everything else is a statement of intent, and only a signed definitive agreement makes the deal. It is a template, not legal advice: have a lawyer read anything you mean to rely on.

Selling machines on a long buying cycle? See how to manage capital equipment sales from first visit to signature.

Working leases? Read how a commercial real estate broker keeps a record of tours and calls that the LOI is drafted from.

Letter of intent vs MOU vs term sheet

Three names for the paper that comes before a contract. They differ more in form than in force:

Letter of intent
Written as a letter from one party to the other, with the intentions and the main terms, signed by both once accepted. Common for purchases, leases and supply deals.
Memorandum of understanding
The same idea in memo form, often between organizations starting a relationship or a project. The University of Toronto's legal office describes MOUs as placeholders until the parties prepare a definitive agreement.
Term sheet
The agreed terms as a list, with few formalities. Common in investment and acquisition deals. flib, a law firm, calls an LOI and a term sheet both preliminary, usually non-binding documents.
Which one binds?
None of them by its title alone. What the document says about being bound, and how complete its terms are, decides. Whichever you use, write it down.

What each kind of letter covers

  • Supply or purchase of goods

    Products, quantities, price or the basis for it, delivery and lead times, the contract term, payment terms, and any trial order first.

  • Commercial lease

    The premises, rent and any increases, the term and start date, permitted use, who pays for fit-out, and conditions such as permits or financing.

  • Business or asset purchase

    What is being bought, the price and how it is paid, the closing date, what happens to employees, and how long due diligence runs. Exclusivity matters most here.

  • Partnership

    What you will do together, what each party brings, how costs and revenue are shared, how decisions are made, and how long it runs.

More for reps who put big deals on paper: commercial real estate broker, capital equipment sales, OEM sales, distributor sales.

Sources

The terms were agreed in a meeting. Get them right on paper.

Price, timeline and the conditions in a letter of intent are settled out loud first: in the negotiation, on the site tour, on the call. Record that meeting in ParrotNotes and you get a summary and the action items, so the letter says what both sides actually agreed. Free for 100 minutes of recording a month.

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