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In business transactions, parties often negotiate and sign a Letter of Intent (LOI) to agree on key terms before drafting a full agreement. An LOI can be formal or informal and varies in length, serving as an initial proposal that is negotiated to reflect both parties' expectations. If an agreement on the LOI cannot be reached, it may indicate difficulties in finalizing the transaction. LOIs are applicable in various deals, including lease arrangements and the purchase or sale of property or business assets. Typically, these letters outline essential points of the proposed transaction.
