A letter of intent (LOI) used to begin negotiations between a seller and buyer or a customer and service provider in a commercial transaction. This Standard Document, with some non-substantive changes in formatting, may also be referred to as a term sheet or memorandum of understanding. This precedent is a non-binding document that can be used between parties to a prospective sale of goods or services contract. This agreement outlines the main issues on which the parties have reached agreement for the contemplated transaction before entering into a final and binding contract. While the document usually does not compel the parties to proceed with the contemplated deal, certain terms may, however, be legally binding even if the parties do not proceed with the transaction, such as terms addressing confidentiality, exclusivity, due diligence, and intellectual property obligations. For more information on commercial transactions see the Commercial Law.
