How to Make and Use a Letter of Intent (LOI)

Whether you're initiating a business deal, applying for a job, or setting the groundwork for a formal agreement, a Letter of Intent (LOI) is a powerful document that outlines intentions before entering a binding contract.

In this guide, we'll walk you through:

• What a Letter of Intent is

• When to use one

• How to draft a professional LOI

• Best practices

• How Plox helps you securely share, track, and manage your LOIs

What is a Letter of Intent (LOI)?

A Letter of Intent (LOI) is a non-binding document that outlines the preliminary understanding between parties. It serves as a formal way to express interest, clarify intentions, and detail the next steps without finalizing a deal.

Common Scenarios for Using an LOI:

• Business mergers or acquisitions

• Employment offers

• Real estate transactions

• Partnerships and joint ventures

Why is a Letter of Intent Important?

• Clarity: It outlines clear expectations and terms.

• Documentation: It serves as a written record of intentions.

• Protection: Though not binding, it reduces the chance of miscommunication.

• Professionalism: Demonstrates seriousness and commitment.

How to Draft a Letter of Intent

When drafting an LOI, clarity and structure are crucial. Here’s a general format:

1. Heading

Include your name, address, date, and recipient’s contact details.

2. Opening Statement

Introduce the purpose of the letter and the parties involved.

3. Body Paragraphs

Break down key details:

• Subject or nature of intent

• Terms or expectations

• Timeline (if applicable)

• Confidentiality clauses (optional)

4. Closing Paragraph

Express intent to move forward and next steps.

5. Signature

Include a formal closing and your signature.

Example: Letter of Intent for Business Partnership

[Your Name]
[Your Address]
[Date]

[Recipient Name]
[Company Name]
[Address]

Subject: Letter of Intent to Form a Business Partnership

Dear [Recipient],

This Letter of Intent outlines my intent to partner with [Company Name] for [purpose]. The partnership would involve [brief overview].

While this is not a binding agreement, it is a foundation for moving toward a formal partnership.

Sincerely,
[Your Name]

Tips for Writing an Effective LOI

• Be specific and concise.

• Avoid ambiguous language.

• Define terms clearly.

• Keep it professional.

Share and Track LOIs with Plox

Drafting your LOI is just the beginning. Plox ensures your document reaches the right hands securely and lets you:

Key Plox Features for LOIs:

• Track who opened your LOI and when

• See which sections were viewed the most

• Protect confidential terms with view restrictions

• Revoke access at any time

Stop guessing if your LOI was read. Start sending smarter with Plox.

Final Thoughts

A Letter of Intent is a vital tool to start any serious negotiation or relationship. With the right structure and tone, it sets the foundation for future agreements.

Ready to draft your LOI and send it with full visibility?

Try Plox today and make every document count.