A letter of intent, commonly referred to as an LOI, is a document that outlines the understanding between or among two or more parties. An LOI is commonly entered into in advance of spending the money to create a formal legal contract and is not a substitute for a formal legal contract. An LOI may be binding, not binding, or partially binding depending upon the desire of the parties. Most are not binding and are unenforceable. The use of letters of intent are common in the business brokerage business. Letters of intent are sometimes referred to as statements of purpose or letters of interest.

Example: Letter of Intent for Business Acquisition

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