Letter of Intent

A letter of intent (LOI) is a document that outlines the broad strokes of a business agreement between corporations. A letter of intent cannot be legally enforced, but rather serves as a clarification of mutual understanding between business entities. LOIs often include certain requirements that are to be outlined in a business contract; however, they may be subject to change once negotiations are made during the contracting process. This includes the timeline in which a business contract must be signed before it is voided, the stipulations of the business agreement, and what parties are involved in the deal itself. Businesses that wish to partner with each other typically draw up a letter of intent to protect their corporate interests before an actual business contract is signed.