Letter of Intent (LOI)

DefinitionA letter of intent (LOI) is a mostly non-binding document that sets out the proposed price, structure, and key terms of an acquisition before the parties commit to full due diligence. It is the point at which a conversation becomes a deal: it aligns both sides on what they are actually negotiating, usually grants the buyer a period of exclusivity, and frames the diligence and closing that follow. Its binding parts are typically limited to confidentiality and exclusivity.