Letter of Intent (LOI)
A mostly non-binding document setting out the agreed price and key terms, which starts exclusive due diligence.
In more detail
The LOI turns interest into a specific deal: price, structure, what is included, the timeline, and usually an exclusivity period during which the seller stops talking to other buyers. Most of it is non-binding, but the exclusivity and confidentiality provisions typically are. Signing one narrows you to a single buyer, so the terms matter more than they appear.
If you are selling
Exclusivity is the real cost. Once you sign, your leverage drops, so settle the terms that matter before signing, not after.
If you are buying
It buys you a clear runway to complete diligence without competing bids.
Related terms
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