Letter of Intent (LOI): Free Template (DOCX) + Format & Examples

A promising deal doesn’t always turn into a final contract right away. Before the parties spend time and money on full legal documents, they need a simple way to confirm the same basic understanding.

A Letter of Intent helps with that. It gives negotiations a clear starting point, outlines the direction of the proposed deal, and helps both parties decide whether it makes sense to move forward.

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What Is a Letter of Intent (LOI)?

A letter of intent (LOI) is a preliminary document that outlines the main terms of a proposed deal before the parties sign the final agreement. It is commonly used when both sides are generally aligned but still need to confirm details, complete due diligence, or negotiate final terms, as explained in Investopedia’s overview of letters of intent.

LOI vs Term Sheet vs MOU

An LOI, a term sheet, and an MOU are all used before a final agreement, but they are not the same document.

Use an LOI if you want to outline a proposed transaction before drafting the final contract. Use a term sheet if the main goal is to review deal economics or investment terms quickly. Use an MOU if the parties are documenting a broader cooperation framework rather than one specific deal.

The title alone does not decide whether the document is binding. What matters is the wording, context, and intent of the parties.

When Do You Need a Letter of Intent?

A Letter of Intent (LOI) is useful when the parties agree on the main direction of a deal but are not ready to sign the final agreement yet. It helps capture the key terms, timeline, and next steps before more detailed documents are prepared.

An LOI is commonly used for:

• Business deals, such as buying a company, selling assets, forming a partnership, or negotiating a joint venture. The U.S. Small Business Administration also highlights due diligence as an important step when buying an existing business.
  
  

• Real estate transactions, where the parties want to outline the price, property details, inspection period, financing terms, or closing timeline.
  
  

• Commercial leases, where the landlord and tenant need to confirm rent, lease term, permitted use, build-out, or operating costs before drafting the lease.
  
  

• Investment or fundraising discussions, where the parties want to record the proposed valuation, investment amount, rights, approvals, or closing conditions. In some cases, a term sheet may be a better fit.

You may not need an LOI if the deal is simple, the terms are already final, and both sides are ready to move straight to the final agreement.

Free Letter of Intent (LOI) Template (DOCX)

If you need a fast starting point, you can download a free letter of intent template (DOCX) and adapt it to your transaction.

The template includes the core LOI structure: party details, a deal overview, key terms, a basic timeline, and a signature section. It should still be tailored to the actual deal, especially if the transaction involves due diligence, exclusivity, confidentiality, financing, or other special conditions.

If you want to move faster, use the Letter of Intent template to generate a draft based on your scenario and then tailor it to your timeline, deal terms, and negotiation points.

Is a Letter of Intent Binding or Non-Binding?

Many LOIs are intended to be mostly non-binding. However, their legal effect depends on the wording, context, and applicable law. In most cases, the LOI is used to outline the main terms of a proposed transaction and confirm that the parties plan to continue negotiating toward a final agreement. That fits general contract principles, including Cornell Law School’s overview of contract law.

At the same time, a poorly drafted LOI can still create unintended binding obligations. As ACC/WilmerHale explains in its discussion of “non-binding” pre-deal documents, these documents can create legal risk if they are not drafted carefully, even when the parties expect them to be non-binding overall.

It is also common for an LOI to make some provisions binding on purpose, such as:

• Confidentiality

• Exclusivity

• Costs or expense reimbursement

Some LOIs may also make governing law or other process terms binding. ACC/WilmerHale specifically notes that pre-deal documents often include legally binding carve-outs such as exclusivity, confidentiality, and expense reimbursement.

The safest approach is to state clearly which parts of the LOI are non-binding and which provisions, if any, are binding from the moment it is signed. In practice, the legal effect depends less on the title of the document and more on its wording, context, and governing law.

Letter of Intent Format: What to Include

A well-structured LOI usually includes:

• Parties — the full legal names of the parties involved.

• Transaction overview — a short description of the deal, such as a business purchase, lease, partnership, or investment.

• Price or consideration — the main economic terms, including price, rent, equity, deposit, or other compensation.

• Timeline — the key dates, milestones, and next steps.

• Due diligence — what will be reviewed, by whom, and within what time period.

• Conditions — financing, approvals, inspections, consents, or other requirements that must be satisfied before the deal moves forward.

• Confidentiality — how sensitive information shared during negotiations will be protected.

• Exclusivity — whether one side agrees not to negotiate with others for a limited time.

• Costs — who pays for legal work, due diligence, inspections, or other transaction expenses.

• Non-binding statement — a clear explanation of which parts of the LOI are non-binding and which parts may still be binding.

• Signatures — signature blocks for the parties or their authorized representatives.

How to Fill Out the LOI Template

Start by replacing all placeholders in the template with your actual deal details. Use clear, specific language. Avoid leaving blanks or using general phrases that could mean different things to each party.

Before sending the draft, follow these steps:

• Confirm the parties. Use full legal names and check that each signer has authority to sign.
  
  

• Add only agreed deal points. Do not include terms that have not been discussed yet unless you clearly mark them as proposals.
  
  

• Be specific with numbers and dates. Include exact amounts, deadlines, review periods, and expected signing or closing dates.
  
  

• Mark open issues. If something is still under discussion, note it clearly instead of making the LOI look more final than it is.
  
  

• Check binding language. Make sure the LOI says which parts are intended to be binding and which are not.
  
  

• Review before sending. Read the draft from the other party’s perspective and remove anything unclear or inconsistent.

The goal is to make the LOI useful for negotiation without turning it into the final agreement.

Letter of Intent Example

Below is a simple LOI example. It shows the basic structure of the document and should be adapted to the actual transaction.

Letter of Intent

Date: 04/23/2026

Parties:
This Letter of Intent is entered into by ABC Holdings LLC (“Buyer”) and North Point Retail Inc. (“Seller”).

Transaction Overview:

The parties intend to continue discussions toward a possible definitive agreement under which Buyer would purchase certain business assets of Seller related to its retail operations.

Price / Consideration:
The proposed purchase price is $850,000, subject to adjustment based on inventory, outstanding liabilities, and any other terms agreed in the transaction documents.

Timeline:
The parties aim to sign a definitive agreement within 30 days after this LOI is signed.

Due Diligence:
Buyer will have 21 days from the date of this LOI to review financial records, material contracts, and other documents reasonably necessary to evaluate the transaction.

Conditions:
This proposal is subject to satisfactory review, internal approvals, and agreement on the transaction documents.

Confidentiality:
Both parties agree to keep non-public information shared during the negotiation process confidential, except where disclosure is required by law.

Exclusivity:
For 14 days after signing this LOI, Seller agrees not to solicit or negotiate competing offers relating to the same assets.

Costs:
Each party will bear its own legal, advisory, and transaction costs unless otherwise agreed in writing.

Non-Binding Statement:
Except for Confidentiality, Exclusivity, Costs, and any other provisions expressly stated as binding, this LOI is non-binding and does not obligate either party to complete the transaction unless a final agreement is signed.

Signatures:

ABC Holdings LLC
By: ____________________
Name:
Title:

North Point Retail Inc.
By: ____________________
Name:
Title:

LOI Templates by Scenario

Choose the template closest to your transaction type. The table below shows the most common LOI templates and the terms they usually need to cover.

Common Mistakes to Avoid

Even if the LOI is not the final agreement, vague language can still create problems. It can slow down negotiations or lead to commitments the parties did not expect.

Before signing or sending an LOI, pay attention to these common mistakes:

• No clear exclusivity end date. If one of the parties agrees not to negotiate with the others, the LOI must clearly indicate when this restriction ends.
  
  

• Vague price terms. If the agreement includes adjustments, deposits, commitments, or other price mechanics, they should be clearly stated.
  
  

• Missing due diligence scope. The LOI should explain what will be reviewed and how long the review period will last.
  
  

• Unclear binding language. The document should clearly indicate which sections are binding and which are non-binding.
  
  

• Using the wrong template. Different types of deals require different LOI terms, so a generic template may miss the most important terms.

The most common mistake is a false sense of clarity: The LOI looks complete, but the most important terms remain fuzzy.

FAQs

Q: How long should a letter of intent be?
A: Most LOIs are short and focused. One to three pages may be enough for a simple transaction. More complex transactions may require a longer LOI, but this should still avoid unnecessary details.

Q: Who should sign the Letter of Intent?
A: The LOI must be signed by the parties involved in the proposed agreement or  by authorized representatives such as company owners, officers, managers,  or agents with the authority to sign.

Q: Can the LOI be changed after it has been sent?
A: Yes. The LOI is often part of the negotiation process, so the other party may suggest edits before signing. Any important changes should be made in writing.

Q: What happens after both parties sign the LOI?
A: The parties usually move on to  the next stage of the agreement, such as due diligence, funding review, preparation of documents,  or negotiation of the final agreement.

Q: Should I send LOI as a Word or PDF document?
A: A Word document is easier to edit during negotiations. A PDF works better for a clean version that is ready to review or sign. In many cases, the parties first exchange edits in the DOCX and sign the final version of the PDF.

Sources and References

• ACC/WilmerHale

• Cornell Law School

• U.S. Small Business Administration

• Georgia Tech

• Investopedia — Letter of Intent (LOI)

• Investopedia — Term Sheet

• LegalZoom

• Nolo — Commercial Leases: Letter of Intent