This letter is not an official sales contract. All terms of the proposed transaction would be specified in the sales contract that will be negotiated, agreed upon and executed by both parties. Of course, you want the potential employer to take this letter seriously, and you want that entity to know how you recently sent this letter. Agreeing on this document as an active statement of intent on any given day often contributes significantly to both objectives. Therefore, the empty line called “date” has been set directly under your address, allowing you to enter the current ad date. If you wish, you may want to consider making an appointment after this letter to account for delivery. We present a letter of intent to buy your company Rain Gutters R Us, its inventory and other assets. We assume that the main conditions of the proposed transactions would be, for the most part, the following. A letter of intent (LOI or LoI, which is sometimes put forward as a statement of intent in law, but only when it refers to a particular document under discussion) is a document that describes the agreement between two or more parties that they intend to formalize in a legally binding agreement. The concept is akin to an agreement, a timetable or a letter of intent.
These outlined agreements may be merger and acquisition agreements,[1] joint venture agreements, lease-sale agreements and several other categories of agreements that may govern essential transactions. A declaration of intent is legally binding if it is indicated in the agreement. Otherwise, the enforcement party would be required to enforce the letter in a complaint to the district court. In cases where the property in question is not listed on a multiple list service, there is no simple way to inform the owner of the property and other interested parties of the intention to purchase. Often it is necessary to officially begin the purchase process, and allow all peripheral stakeholders to start all other processes, with a declaration of intent. For example, a multi-million dollar loan for an industrial property may require a letter of intent before a financial institution allows staff to spend time working on the loan necessary to complete the sale. The same can be followed by any company at the time of purchase. Tenants and landlords can sign a letter of intent before signing a tenancy agreement setting out rental prices and all the terms of the upcoming lease. [Citation required] A Memorandum of Understanding (MOU) describes a broad agreement negotiated in good faith between two (2) parties.
The letter expresses the “intention” of both parties, which will form the basis of a formal contract. It is recommended to include a clause indicating whether the document is binding or not, in order to avoid legal problems. If this is not the case, a court may consider one of the conditions set out in the letter to be binding and enforceable. Before an agreement can be reached, the parties must negotiate the terms.
