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In business transactions, parties often negotiate and sign a letter of intent (LOI) to outline preliminary terms before drafting a full agreement. An LOI can be formal or informal and varies in length, serving as a proposal from one party that is negotiated to reflect both parties' expectations. If the parties cannot reach an agreement on the LOI, it indicates potential difficulties in completing the transaction. LOIs can be applied to various deals, including lease arrangements, property sales, or business asset transactions. Typically, letters of intent include key elements of the proposed deal.
