What Is A Letter Of Intent?
A letter of intent is a formal document that denotes an expression of interest in undertaking a task such as an application for employment or an educational program.
It is also referred to as a terms sheet, framework letter, assurance letter, or letter of interest as the case may be.
A letter of intent is commonly used to clear doubts about specific business issues dealing with prospective job candidates who want to work for an organization or make purchases.
It is not a legally binding document but a show of good faith demonstrating commitment and willingness to work on whatever objective is spelled out.
The letter of intent lays down a marker for the other party respectfully and professionally, showing interest but not necessarily suggesting an agreement immediately.
Each party is thus allowed to specify the working relationship and map out plans without incurring legal costs.
Letter of Intent Example
Purchase of Real Estate or Business: It is an intelligent approach to send out a letter of intent to an intended partner in an investment, merger, or acquisition of a business or real estate (residential or commercial). It should be clearly stated that the letter does not stand for an official purchase agreement and that the terms of the contract will be stated in the legally binding document.
Scholarship Acceptance: A student can send this letter to an institution or organization when accepting a scholarship offer for an internship or academic study. The letter should indicate the appreciation for the opportunity on the part of the student and the excitement and readiness to begin the experience.
Employment: A prospective job applicant can send a letter of intent to an organization, whether openings are available or not. The letter should indicate the preferable position for the individual, or the choice department.
Acquisition: This type of letter of intent is very similar to that which applies to purchasing a business or real estate. In this case, however, confidentiality is vital, and senders may also want to include the basic terms of the deal and a statement showing the preparation of the agreement and the procedures for negotiation.« Back to Glossary Index