Before the Contract, Get It in Writing: Why a Letter of Intent Can Save the Deal

You’re close to a deal. Everyone’s on board—at least in theory. But then the contract drags on. Terms shift. Tensions rise. Eventually, the deal falls apart.

What went wrong? Probably this: you skipped the Letter of Intent (LOI).

What Is a Letter of Intent?

A Letter of Intent (LOI) is a short, non-binding document that outlines the key terms of a deal before the formal contract is drafted. It sets expectations, flags deal-breakers early, and keeps everyone aligned.

Think of it as a handshake with bullet points—and legal strategy baked in.

Why LOIs Matter in Business Deals

1. Clarifies Key Deal Points Early: Price, scope, deadlines, and conditions are in black and white—no more guessing.
2. Prevents Misunderstandings: Surprises kill deals. LOIs surface red flags before you sink time into a full contract.
3. Saves Legal Fees: Lawyers spend less time drafting when terms are pre-negotiated in an LOI.

Is a Letter of Intent Legally Binding?

Usually not. But smart LOIs include binding provisions for confidentiality, exclusivity, and negotiation obligations. These can be enforced even if the final deal falls through.

Common Uses for LOIs

• Commercial leases
• Business asset purchases
• Partnership or joint venture negotiations
• Construction and vendor agreements

When to Call a Contract Attorney

An LOI doesn’t replace a contract—but it sets the table. If you're preparing for a business deal, talk to an attorney early. We’ll help you draft a Letter of Intent that protects your leverage and avoids costly surprises.

At JDE Law Firm, PLLC, we help businesses negotiate LOIs and enforce them when needed. If the other party walked away after promising terms—or if you want to do it right the first time—we’re here to help.

📞 NY: 718-966-0877 | NJ: 732-490-7120

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