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Letter of intent definition

What is a letter of intent? 
Just as it sounds, a letter of intent (LOI) is a document that is given to express the interest to take the next steps in a transaction, such as to purchase a business.

An LOI is a nonbinding agreement that, in addition to expressing interest, may lay out initial terms for the contemplated transaction.

While it is not legally binding, the agreement is an important part of a purchasing process because it typically is associated with a confidentiality agreement signed by both parties and an agreement to temporarily forsake other offers by the seller. 
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