Letter of intent is a documented agreement between two or more than two parties before finalization of an agreement. Letter of intent is written on similar concept of “heads of agreement”. These agreements are of several kinds such as Asset Purchase Agreement, Share Purchase Agreement, Joint Venture Agreement etc. Letter of intent is similar to written contracts but not bind parties entirely. Letter of intent is written for following purposes:
- To clarify vital points of complex transactions for convenience of parties.
- For official declaration of parties involved in current negotiation such as merger or joint venture proposal.
- To provide safeguard in case a deal is collapses during negotiation.
Letter of intent shows your intention on a particular matter and just like other formal letters, style and wording of letter of intent depends on specific circumstances. You should use appropriate tone in letter by considering your audience such as if recipient is your friend or you are well known to him/her then you can use casual tone in letter of intent but be careful while writing business letter because these letters require formal style. Try to keep letter short and concise therefore you should explain your point of view in less possible words.
Here I am sharing a sample letter of intent with you; feel free to consult it before writing your own letter of intent. You can also use this sample letter of intent after some modifications. Brackets in this sample letter show that you should fill it with your required information so if you want to use it as it is then remove all brackets.
Sample Letter of Intent
[Your street address]
[Your city and state]
Dear [name of present owner]:
I and my business partner [write name of your business partner] have a concentrated discussion on [write day and date here], we discussed the whole situation, and we concluded that we are intended to purchase your business, Twice Over. We are willing to pay your requested purchase price of [state price here], which includes both [write details here such as the business and all equipment necessary to operate it], as per our discussion.
We would like to meet with you next [write date, day and time here], to finalize the sale. We will bring all the necessary paperwork, signed and completed, and we will tender payment, as agreed. At that meeting, we will also set a date that will not exceed [write number of days here] days for when we will take over the operation.