Non-Binding Letter of Intent Template: Terms & Scope

NON-BINDING LETTER OF INTENT TEMPLATE FAQ

What is a non-binding letter of intent?

A non-binding letter of intent (LOI) is a document where parties outline the main business terms of a proposed deal, but state that they are not yet legally obligated to complete the transaction. It captures intent and expectations while leaving room for due diligence and final contract negotiation.

When should you use a non-binding LOI?

Use a non-binding LOI when the parties agree in principle on key terms — such as price, scope, contributions, or timeline — but still need to perform due diligence, obtain approvals, and negotiate a detailed agreement. It is common for partnerships, investments, asset sales, joint ventures, and service arrangements.

What should a non-binding letter of intent include?

A clear non-binding LOI usually identifies the parties, describes the proposed transaction or relationship, summarizes key commercial terms, outlines the process and timeline for due diligence and definitive agreements, and explains which provisions (if any) are intended to be binding, such as confidentiality or exclusivity.

Is a non-binding LOI ever partially binding?

Yes. Even if the main business terms are non-binding, the parties can agree that some sections — such as confidentiality, exclusivity (no-shop), costs, or governing law — are legally binding. The LOI should clearly separate binding provisions from non-binding ones to reduce confusion.

Does a non-binding LOI replace a final contract?

No. A non-binding LOI is typically a roadmap, not the final contract. The detailed rights and obligations of the parties are contained in later definitive agreements (for example, a purchase agreement, services agreement, investment agreement, or joint venture agreement).

Can AI Lawyer help me customize this non-binding LOI template?

Yes. AI Lawyer can help you adapt this Non-Binding Letter of Intent template to your situation by adjusting the description of the transaction, key terms, binding provisions, and timeline while keeping the letter clear and consistent. You still choose the final terms and remain responsible for any legal review and signatures.