Okuzeka
Contract & Commercial Law vocabulary · Forming & Drafting Contracts

Letter of intent

Meaning in contract & commercial law, with examples

nounCommon term

In contract & commercial law, letter of intent means: A document that records the parties' intention to make a deal and its main points before the final contract is negotiated and signed.

In Turkish: niyet mektubu, niyet beyanı

How it is used

Shortened to LOI. It usually states that it is non-binding, except for clauses such as confidentiality, exclusivity and costs. Courts may still treat it as binding if its wording and the parties' conduct point that way, so precise drafting matters.

Example sentences

  1. The buyer signed a letter of intent setting out the price range and timetable.

  2. Apart from the exclusivity clause, the letter of intent is not binding.

Common collocations

  • sign a letter of intent
  • non-binding letter of intent
  • issue a letter of intent
  • memorandum of understandingA document that records the main points the parties have agreed on and their plan to cooperate, usually without creating full legal obligations.
  • bindingHaving legal force, so that the parties must do what they have agreed and can be held responsible if they do not.
  • negotiateTo discuss the terms of a deal with the other side in order to reach an agreement that both can accept.
  • acquisitionThe purchase of a company, part of a company or a business, usually by buying its shares or its assets.

More terms: Forming & Drafting Contracts

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This page explains English vocabulary for learners. It is not legal advice.