What is a Letter of Intent?

A Letter of Intent, also known as a Memorandum of Understanding (MOU), is a non-binding document that summarises the results of negotiations between two parties in order to facilitate the future formation of a contract.

Letter of Intent

What is a Letter of Intent?

A Letter of Intent is a document containing information about the commitment of one party to do business with another party. It contains all the information regarding the deal, which both parties have agreed to do business in the near future. It is basically a non-binding document that summarizes the results of negotiations between two parties in order to facilitate the future formation of a contract.

A Letter of Intent, also known as a Memorandum of Understanding or Heads of Terms, is useful when parties are not ready to sign a contract but want to record the progress of initial negotiations and issues that need resolution. It contains information such as the main content of the future contract and the time when the contract will be signed. A Memorandum of Understanding may also contain details about how further negotiations should be conducted and any exclusivity period during which the parties are precluded from negotiating with other parties, and has the effect of pushing forward contract negotiations.

How do you write a Letter of Intent?

A proper Letter of Intent should address key points that need to be resolved before entering into a contract. The details about the parties and commitment should be clearly mentioned in order to minimize the risk of disagreements in the future.

Before you begin drafting a letter choose the right format and layout. Next, do your research well. Know the company you are applying to. Start with a bold introduction and mention how you are the right fit and will compliment the other company too. End your letter with some come form of call to action but remember to keep your closing professional.

 Choose the Right Letter of Intent Format and Layout


What is the purpose of a Letter of Intent?

There are many types of a Letter of Intent: these include an intent to purchase; an intent to return to work; an intent for admission; an intent to enter into a contract. A letter of Intent outline all the terms of an agreement made before entering into a contract. It should address pricing, conditions, payment deadlines, obligations of each party, the date for the signing of the proposed agreement, and the date of memorandum of understanding. It records all the points that need resolution before the contract which can save time and money for both parties involved.

Are Letters of Intent legally binding?

Strictly speaking, a Letter of Intent is not legally binding because it is a document that reflects the intention of two parties for doing business together if everything goes as per the plan.


A Letter of Intent is a document that reflects the intention of involved parties to show their commitment towards a common goal. As it has many types, it might be slightly different according to the nature of the document but the purpose of writing it is the same in almost every case. A Letter of Intent helps individuals and businesses to reflect their interest in certain areas which could result in a mutually beneficial relationship.

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