Glossary · Deal documents
Letter of intent
Also called LOI, letters of intent
Definition
A letter of intent (LOI) sets out the main terms both sides have agreed on, such as the price, the structure and the timetable, before the full purchase agreement is written. Most of it is not binding, but clauses on exclusivity and confidentiality usually are. In many processes, the deepest level of data room access opens after the LOI is signed.
Where letter of intent comes up
On this site, in our guides and in the conversations we've written up.
Related terms
Term sheet A short, mostly non-binding summary of the key terms of an investment or deal. Exclusivity period A set time in which the seller agrees to negotiate with one buyer only. Non-disclosure agreement A contract in which the receiving party promises to keep the information it is given confidential. Share purchase agreement The contract by which a buyer acquires the shares of a company, with the price, warranties and conditions. Asset purchase agreement The contract for buying selected assets and liabilities of a business, instead of its shares. Change of control clause A contract term that lets the other party end or renegotiate the contract if the company is sold. Confidential information memorandum The detailed sales document a seller's adviser sends to buyers after they sign an NDA. Disclosure letter The seller's list of known exceptions to its warranties, which limits what the buyer can later claim for.