Business contractsLetter
Letter of intent (LOI) template
Set out the main terms of a deal before the full contract is drafted: what is proposed, the price, the timetable and the conditions, with a clear line between what binds both sides now and what does not.
Opens in the Salsox editor with 4 signing fields already placed for Proposing party and Receiving party. Add their emails and send. The free plan sends 3 documents a month.
Who signs
- Proposing party (you)
- Receiving party
Preview
Letter of Intent
24 October 2026To: Helen Carter, Chief Executive, Carter Precision Tools Ltd
Re: Proposed the purchase of the entire share capital of Carter Precision Tools Ltd
This letter sets out the main terms on which Westbrook Industrial Holdings plc (the "Proposer") proposes to proceed with the purchase of the entire share capital of Carter Precision Tools Ltd (the "Transaction").
Part A: proposed terms (not binding)
1. Price. GBP 6,200,000, on a cash-free, debt-free basis, subject to a normal level of working capital.
2. Structure of payment. GBP 5,400,000 at completion and GBP 800,000 twelve months later, subject to the warranties.
3. Conditions. The Transaction is conditional on satisfactory financial, legal and commercial due diligence, the board approval of both companies, and new service agreements with the two current directors.
4. Due diligence. The Proposer expects to complete its due diligence within six weeks of countersignature, and the recipient will give reasonable access to information, premises and people for that purpose.
5. Timetable. Both parties will aim to sign a full agreement and complete the Transaction by 31 January 2027.
The terms in Part A are a statement of current intention only. They do not create any legal obligation. No party is bound to proceed with the Transaction unless and until a full written agreement is signed.
Part B: binding terms
6. Exclusivity. For 60 days from the date of countersignature, the recipient will not solicit, encourage or negotiate any offer from anyone else for the same or a similar transaction, and will tell the Proposer promptly of any approach received.
7. Confidentiality. Each party will keep the existence and terms of this letter, and all information received in connection with the Transaction, confidential, except as needed to share with its advisers or as required by law.
8. Costs. Each party pays its own costs in connection with the Transaction, whether or not it proceeds.
9. Governing law. This letter is governed by the law of England and Wales.
Please confirm your agreement by countersigning below.
Yours sincerely,
Signature · Proposing partyRichard Hale, Managing Director, for Westbrook Industrial Holdings plc
Agreed and accepted for Carter Precision Tools Ltd:
Signature: Signature · Receiving party Date: Date · Receiving party Name: Name · Receiving party
These templates are general starting points, not legal advice. Laws differ between countries and states: check that a template suits your situation, or ask a lawyer, before you rely on it.
About the Letter of intent (LOI) template
A letter of intent records that two parties mean to do a deal and the main terms they have in mind, before the time and cost of a full contract. It is common for company and property purchases, joint ventures, large supply contracts and senior hires. It lets both sides check they agree on the essentials and gives advisers a brief to draft from.
The most important thing an LOI does is say which parts are binding. This template keeps the commercial terms, the price, the structure and the conditions, explicitly not binding, so either side can still walk away during due diligence. It makes three parts binding: exclusivity for a limited period, confidentiality, and each side paying its own costs.
Write the commercial terms in as much detail as you have agreed. A vague LOI saves time now and costs it later, when the gap between what each side thought they agreed shows up in the full contract.
- Signers
- 2
- Signing fields placed
- 4
- Details to fill in
- 13
How to use this template
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Questions
Is a letter of intent legally binding?
Only the parts it says are binding. This template makes exclusivity, confidentiality and costs binding, and states clearly that the deal terms are not, until a full agreement is signed.
What is exclusivity in an LOI?
A promise by the seller not to negotiate with anyone else for a set period, giving the buyer time to do due diligence without being outbid. Keep the period realistic for the work involved.
Is an LOI the same as a memorandum of understanding?
They are close. An LOI is usually one party proposing terms to another; an MOU often records a shared understanding between partners. Both separate binding from non-binding terms.
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