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Letter of Intent

Letter of Intent

5.0 (1)
under 15 minutes
under 15 minutes
Last updated December 2018
Last updated October 17, 2019
Suitable for suitable for all States and territories
Suitable for suitable for all States and territories

A Letter of Intent (LOI) is a document signed between two parties when they wish to commence formal negotiations. Customisable and ready to use in under 15 minutes.

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Document Overview

A Letter of Intent (LOI) is a document signed between two parties when they wish to commence formal negotiations. The terms of such a letter can differ, but its overarching purpose is to set things in motion, with a signed agreement being the finish line. This is often useful in situations where commencement can’t afford to be delayed while waiting for a formal contract to be drafted. A common example of this is major construction and infrastructure projects that typically have tight deadlines. Letters of Intent are regularly associated and confused for a memorandum of understanding. The key element that separates the two documents is the ability for a letter of intent to become legally binding in certain instances. 

What’s the difference between a Letter of Intent and Memorandum of Understanding?

A memorandum of understanding sets out the proposed terms in the negotiation stage, however, it is not legally binding in nature. A letter of intent is used in most large business transactions and outlines the process of negotiation and provides a structure for how things will proceed in the intended agreement. Unlike a memorandum of understanding, provision of a letter of intent can be considered legally binding in regards to certain provisions, if specified within the letter of intent.

Use this Letter of Intent If:

  • You wish to establish the basic terms to be used in a future agreement between parties
  • You want to commence formal negotiation with another party

What does this Letter of Intent Cover?

  • Acknowledgement of limitations
  • Timescale 
  • Notice of termination
  • Primary obligations
  • Confidentiality
  • Costs
  • Additional agreements
  • Rights and remedies
  • Governing law 
  • Commencement

 


Further Information:

 

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