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A letter of intent (LOI) is a document in which parties indicate their intention to enter into an agreement in the future. It's often viewed as a preliminary agreement that outlines key points of a potential deal but is not a binding contract. Many business clients frequently inquire about LOIs, revealing that most do not fully understand their purpose. LOIs serve as a way for parties to express interest and outline expectations before finalizing a formal contract. Essentially, they establish a framework for future negotiations, making them similar to a substitute teacher in the contract world—setting the stage for what may come later without the immediacy of a binding commitment.
