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Letter of Intent
THIS LETTER OF INTENT (the "Document") made as of this ________ day of ________________, ________ (the "Execution Date"),
BETWEEN:
____________________ of _________________________
(the "Purchaser")
- AND -
(the "Seller")
BACKGROUND:
This Document will establish the basic terms to be used in a future real estate contract for sale (the "Contract") between the Seller and the Purchaser. The terms contained in this Document are not comprehensive and it is expected that additional terms may be added, and existing terms may be changed or deleted. The basic terms are as follows:
This Document accurately reflects the understanding between the Seller and the Purchaser, signed on this ________ day of ________________, ________.
_______________________________________________ (Purchaser)
_______________________________________________ (Seller)
A Letter of Intent, also known as an LOI or letter of interest, is a non-binding document that specifies one party's intentions towards another.
Generally, a Letter of Intent is used for business or real estate transactions to indicate an interested party's intention to purchase the business or property.
A Letter of Intent includes information about:
A Letter of Intent will also list details regarding the intended transaction, such as, if it is real estate related, whether it is commercial, residential, industrial, agricultural, or recreational property.
In a business transaction, it would specify what was being purchased, such as assets (furniture, supplies, vehicles), or shares.
You may also include clauses in regards to confidentiality, if necessary.
A Letter of Intent can serve many purposes, the most common being that it can provide a clear, concise version of your negotiations prior to signing a binding contract. This means that both parties involved can ensure they are on the same terms, and in agreement, before the transaction moves on to the next step.
LawDepot's Letter of Intent is not legally binding. A Letter of Intent serves to outline the terms of an agreement before an actual contract is made.
For example, if you intend to purchase a business, but are waiting on certain details to be finalized before going ahead, you may wish to use a Letter of Intent to show the seller that you are serious about your intentions in relation to purchasing their company.
This would not make you legally obligated to purchase the business, but would simply make your intentions clear to the seller.
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