Letter of Intent to Purchase

Letter of Intent to Purchase

Last updated November 24th, 2023

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letter of intent to purchase is a written document in which a buyer establishes their intent to purchase a product or service. The document details what will be purchased, the payment terms, and mutual promises between the parties (such as confidentiality clauses). Through the letter, the parties can express their interest in proceeding with the deal and ensure they are on the same page before creating the final purchase contract. 

By Type (3)

Business Purchase LOI – Used by a buyer to state their intent to purchase a business entity.

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Real Estate Purchase LOI – A written letter in which two parties set forth the preliminary terms of a real estate purchase.

Download: PDF, Word (.docx), OpenDocument


Stock Purchase LOI – Allows two parties to establish their intention to enter into a stock purchase contract.

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When to Use

A letter of intent to purchase is created once two parties have made a decision to enter into a purchase agreement and wish to formalize their intent. The document allows a buyer and seller who are not yet ready to create a final purchase contract to secure their buyer-seller relationship as they refine the specifics of the arrangement.

Overview of a Letter of Intent to Purchase

A letter of intent to purchase sets forth the key elements of a proposed transaction between two parties, including:

  • The buyer and seller’s information
  • The product or service
  • The purchase price and payment details (e.g., payment due date, deposits, etc.)
  • The financing terms (if applicable)

Once the above information is entered, the parties should sign and date the letter.


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Date: [DATE]




This Letter of Intent (the “Letter”) defines the proposed terms and conditions of the Purchase indicated below and will provide the rules governing the relationship of the Parties’ of this Letter until a final written contract regarding the same purchase and objective (the “Definitive Agreement”). The following terms apply to the Purchase presented in this Letter and in the Definitive Agreement:

1. THE BUYER[BUYER NAME] (the “Buyer”) with a mailing address of [ADDRESS].

2. THE SELLER[SELLER NAME] (the “Seller”) with a mailing address of [ADDRESS].

3. PURCHASE. If the parties make no further revisions to the agreement, the Buyer shall pay the Seller $[PURCHASE PRICE] (the “Purchase Price”) in return for [GOODS/SERVICES] (the “Purchase”).

4. PAYMENT. Payment shall be delivered as follows: [DESCRIBE MANNER OF PAYMENT].

5. DEPOSIT. The Parties acknowledge that a deposit is [WRITE “required” OR “not required”]. If required, the Buyer shall provide a [WRITE “refundable” OR “non-refundable”] deposit of $[DEPOSIT AMOUNT].

Note: If a deposit is not required, delete the sentence after “If required” above.

6. FINANCING. The Buyer has expressed that this Letter is [WRITE “conditional” OR “not conditional”] upon the Buyer’s ability to secure financing. If conditional, the financing shall be subject to the following terms: [DESCRIBE CONDITIONAL TERMS].

Note: If the letter is not conditional, delete the sentence after “If conditional” above.

7. INTENTION OF THE PARTIES. This letter establishes the parties’ intent to use their best effort to come to a Definitive Agreement, in good faith, regarding the subject matter stated herein. Not including sections 5 to 9, which shall be legally binding, no other section in this document will be legally binding until the Parties execute a Definitive Agreement.

8. GOVERNING LAW. This Letter shall be governed under the laws of the State of [STATE NAME].


Seller Signature: ___________________ Date: [MM/DD/YYYY]
Print Name: [SELLER NAME]

Buyer Signature: ___________________ Date: [MM/DD/YYYY]
Print Name: [BUYER NAME]

Why Use a Letter of Intent to Purchase

A letter of intent to purchase provides a starting point for a purchase’s negotiations and locks in an interested party’s spot as the purchaser. The letter acts as a symbol of the buyer’s intention and provides assurances that they will follow through with their decision. Additionally, the letter allows sellers to introduce the arrangement’s general terms and conditions and prevent any misunderstandings before any further negotiations take place.