A Letter of Intent is a letter written by one party declaring the intent to do business with another party. Letters of Intent are formal; professional documents used when to formally state one party’s intent to do business with another party. They are generally considered non-binding agreements to negotiate particular points in good faith, but this fact must be stated in the letter of intent.
Otherwise, a letter of intent can be shown to be binding in some cases.
Common Types of Letters of Intent
Letters of intent are used for many types of agreements. Here are some common types of letters of intent:
- Letter of Intent to purchase a business or high-value item
- Letter of Intent for a job (also called a letter of interest)
- Letter of Intent to accept an internship
- Letter of Intent to accept a scholarship
- Letter of Intent for college (a cover letter for a college application)
- Letter of Intent for a grant (a request for information from a grant-maker)
Letters of intent to accept a scholarship are generally considered binding. They prohibit other schools from actively recruiting the student, and prohibit the student from accepting a scholarship from another school for the academic year. Letters of intent to accept an internship are also commitments.
The basic format of a letter of intent is the same, regardless of the application or the need for the letter. Some are more formal than others. Letters of intent to purchase a business are professionally written and detailed. They might have some articles, such as due diligence and non-disclosure, that are binding.
Every letter of intent should have an introductory paragraph in which the intent is stated. The remainder of the letter outlines the conditions placed upon the negotiations. A letter of intent to purchase a business should also include:
- Details about what is being negotiated – the company, all it’s holdings, debts, customers, stocks, etc.
- Proposed compensation
- Payment information
- Any conditions and limitations imposed by the letter of intent
- A disclaimer
- A time frame for negotiations
Less Formal Letters of Intent
Many letters of intent are less formal. For example, a letter of intent to accept a football scholarship might contain only a few lines. The student needs to express their intent to accept the scholarship and show gratitude and excitement. A more professional version of this letter is commonly used to accept an internship.
Other letters of intent are primarily written with the intent of introducing yourself, your interest or intent, and promoting yourself to a company or school. The exception is a letter of interest for a grant. This letter introduces the organization, its mission, and describes how the grant can help the organization fulfill its mission. The writer should request application forms and information.
Letter of Intent Format
Here is a basic format for a letter of intent to purchase a company.
{your name}
{your organization’s name}
{your address}
{date}
{recipient name}
{recipient organization’s name}
{recipient address}
Dear {recipient}:
{Use this space to declare your intent and to formally notify your recipient that the remainder of the letter contains the conditions of negotiations.}
{Use this space to detail the target company’s assets and liabilities that you will be assuming.}
{Use this space to discuss the purchase price and how it will be paid – conditionally. This is not a formal contract.}
{Use this space to discuss the conditions and limitations of the negotiation.}
{Use this space to declare that the letter is not an official purchase contract. Note any of the conditions or limitations that are legally binding.}
{Use this space for your anticipated timeline for negotiations and purchase.}
Sincerely,
{your signature}
{your name}
Sample Letter of Intent
Here is a sample letter based on the above format.
David Meyers
Meyers Holdings, Inc.
200 West Meridian
Jacobson, NC 29776
May 25, 2022
Ellory Semoray
Middleton Manufacturing
8967 South Sheridan Road
Sampson, NC 29768
Dear Mr. Sampson:
This letter of intent serves to notify the recipient of our intent to purchase Middleton Manufacturing and all its holdings. We anticipate the principle terms of the negotiation and the purchase to be as follows.
We will acquire Middleton Manufacturing and all its buildings, land, assets, liabilities, and customers.
We will provide compensation in the amount of $690,000, according to these terms: $200,000 will be paid at the execution of the purchase agreement and the remainder will be financed.
The following conditions are binding and non-negotiable:
· Each party will be responsible for their costs during negotiation and purchase agreements.
· Both parties will negotiate in good faith and with due diligence.
Please note this is not an official contract to purchase. This letter is not legally binding, with the exception of the two points immediately preceding.
We anticipate that negotiations will be concluded and a purchase agreement will be executed on July 22, 2022.
Sincerely,
David Meyers
David Meyers
Letter of Intent Examples & Templates
Having a basic format for a letter of intent can make a time-consuming and challenging job easier and faster. Feel free to use our formats and sample letters to write your letters of intent.
Letter of Intent for a Job
A letter of intent for a job, also called a letter of interest, is a letter written to introduce yourself to a company and inquire about potential jobs within the company. It expresses your desire to work for the company and requests an informational interview. These letters help get your foot in the door of your target company.
Letter of Intent to Purchase
A letter of intent to purchase is a formal document used to express intent to purchase a company or other high-value item. These letters of intent are generally considered non-binding. We have provided a basic format and a sample letter for this letter of intent above.
Letter of Intent for Internship
A letter of intent for the internship is a letter notifying a company you will be accepting their offer for an internship. This letter is generally considered binding, so be sure you are ready to commit before you sign this letter. A letter of interest for an internship, on the other hand, introduces yourself and expresses interest in a potential internship.
Letter of Intent for College
A letter of intent for college is a letter written with the intent of introducing yourself to a college. This type of letter is also known as a cover letter for a college application, whether for undergraduate or graduate programs. It expresses your interest in attending the college.
Letters of intent are many, and they each have a different purpose. Each can be accomplished with a basic format like the one we have provided above. Your intent determines the level of detail involved in your letter. When you write a letter of intent, use a professional tone, and express your intent clearly.
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