Letter of intent (LOI) – a letter where the author (for example, the buyer) formally states his intentions to do something, for example: to buy a batch of goods on certain terms, to sign a contract, to carry out the purchase and sale of shares, enter into full or partial control of the company, etc.
The purposes of a letter of intent may be:
The designation of conditions to the supplier by the buyer, which may include, for example: the quantity of products supplied, their quality, delivery conditions, and sometimes – and the price at which he agrees to carry out the transaction.
Providing the supplier with more complete information (including, for example, details) about the buyer.
Providing a guarantee in case the deal “fails” during negotiations.
Providing advance notice of further intentions after contracts are executed or certain conditions are met (e.g., intent to enter into an employment contract after graduation).
The main points that are typically included in a letter of intent include
On the letter form indicate the mandatory items: the name of the Commodities, the target purchase price, delivery volumes, port of reception, specifications of the Commodities, payer’s bank, company details, company website, signature and seal of the head of the company.