What To Include In A Letter Of Intent (2026)

Choosing the Right LOI Type

There are many different types of letters of intent. These are a few examples:

• A business purchase letter of intent proposes a business acquisition.
• An investment letter of intent expresses an interest in investing in a particular company.
• A job letter of intent expresses interest in a specific position (or even in working for a particular company).

While selecting the right type of LOI is important, it’s also crucial to personalize each letter to the audience. Name the recipient's company and the specific transaction proposed. State why you chose this particular party to work with.

Core Elements Every LOI Needs

Many people underestimate the importance of clearly stating their purpose and the parties involved. Within the first few sentences, your recipient should know who you are and why you’re writing.

Are you wondering what to include in a letter of intent? Exactly what you include will depend on individual circumstances, but in general, an LOI should at least include the following:

• A brief description of the deal or relationship you’re proposing
• Proposed financial terms, such as the suggested purchase price and transaction
• Type of consideration, such as cash, financing, seller note or stock
• An explanation of your impact (or value proposition)
• A conclusion encouraging the recipient to take the next step (often a phone call or meeting)
• Attachments of any supporting documents
• Confidentiality or non-disclosure agreement
• Exclusive negotiation or no-shop period
• Due diligence period
• Expiration date of the letter of intent
• Milestone deadlines for negotiating a deal and providing documents
• Governing law
• Dated signature blocks for each party

The letter should detail the pricing and how it will be paid. Vague language can lead to misunderstandings or even a collapse during due diligence. Your LOI should also clearly state any contingencies. For instance, when writing a letter of intent to donate, many would-be donors stipulate how they want money to be used.

Including Non-Binding Provisions

In a letter of intent, non-binding provisions are those that the parties don’t intend to be legally enforceable. Examples include pricing, transaction structure and timelines.

Most terms are intended to be non-binding at the letter-of-intent stage. Including them helps everyone involved stay on the same page, and it may reduce the risk of legal disputes later on.

However, some terms are meant to bind the parties to the letter of intent, such as the confidentiality clause, the exclusivity or no-shop clause, the expense allocations, the governing law selected by the parties and the non-binding clause.

Make Clear What Is and Isn't Binding

Using the title “letter of intent” will not make it non-binding. Instead, courts consider the letter’s content and the parties’ behavior to determine whether it constitutes a binding contract or a non-binding letter of intent.

Commitment words like “shall,” “agree” and “accept” imply the document is a contract. Even stating that the parties agree to negotiate in good faith might create a binding agreement. Similarly, if the parties treat it as a contract by relying on its “terms,” a court could enforce those terms.

Parties should include an express clause identifying which provisions are meant to be binding. The letter of intent should likely also state that material terms remain unresolved. This statement signals that the letter merely provides a framework for negotiating a deal.

Writing the Letter Step by Step

A letter of intent should follow a business letter format:

• Start with a header including the date, your contact info and the recipient’s contact info
• Include a professional greeting
• Clearly state why you’re writing and explain your proposed terms or qualifications
• Finish with a strong conclusion
• A strong letter of intent should be concise and persuasive. Knowing how to format a letter of intent makes it easier to achieve both.

What Happens After You Send the LOI?

After sending the LOI, the parties will sign the document and begin due diligence. If due diligence and negotiations proceed smoothly, the parties will typically reach a definitive agreement that supersedes the LOI.

If no agreement is reached or the due diligence raises concerns, either party can walk away, generally without adverse consequences and with the protection of the LOI’s confidentiality clause.

Get Guidance on What to Include in a Letter of Intent

In many cases, your letter of intent is your first point of contact with the person or business entity you want to work with. A clear, well-written LOI can dramatically increase your chances of success. If you want to learn more about how to write your letter or what to include, visit our collection of legal templates and guides.