Skip to content
Welcome back Continue →

Free letter of intent (LOI) template (Word)

Reviewed by Clausery editors · · 3 min read

A short document outlining the key terms of a proposed deal (business sale, investment, lease, job offer, partnership) before a full contract is negotiated and signed.

Build your letter of intent → Download Word

No sign-up. Editable Word (.docx) or print to PDF. Your answers stay in your browser. Updated .

A letter of intent (LOI, or memorandum of understanding/term sheet) sets out the headline terms parties have agreed on before they spend time negotiating a full contract. It covers price/key terms, timeline, exclusivity (if any), confidentiality, and which parts are binding vs non-binding.

Most LOIs are mostly non-binding except for specific clauses (confidentiality, exclusivity, costs, governing law). Make it clear which parts are binding to avoid accidentally creating a contract before terms are final.

What to include#

  • Parties and transaction. Buyer/seller (or parties) names, transaction type (asset purchase, stock purchase, lease, investment, employment), and the target/business/property.
  • Key deal terms. Purchase price (or salary/grant/rent), payment structure, key assets included, major conditions and contingencies.
  • Timeline and due diligence. Expected signing date, due-diligence period, access to information, and key milestones.
  • Binding provisions. Confidentiality, exclusivity/no-shop period, costs/expenses, non-solicitation of employees, and governing law.
  • Non-binding statement. Clear statement that the LOI is non-binding (except the listed provisions) and no contract exists until a definitive agreement is signed.

How to fill it in#

  1. Step 1: Agree on headline terms

    Negotiate price, structure and major deal points verbally or in email before drafting the LOI.

  2. Step 2: Mark binding vs non-binding

    Explicitly identify which clauses are binding (usually confidentiality, exclusivity, expenses) and that the rest is not a contract.

  3. Step 3: Set reasonable exclusivity

    If you ask for a no-shop period, keep it short (30-60 days) so neither side is locked in forever.

  4. Step 4: Outline due diligence

    State what access you will provide or expect, and any conditions that must be satisfied.

  5. Step 5: Sign and move to definitive agreement

    Both parties sign to confirm the framework; lawyers then draft the full contract based on these terms.

Memorandum of understanding

Slightly more formal cousin of the LOI for partnerships/joint projects.

Partnership agreement

Final agreement for business partners.

Purchase order

Binding order for goods/services at smaller scale.

Job offer letter

Employment-specific LOI for new hires.

Free contract templates

Full template library by category.

Questions

Is an LOI legally binding?

Usually not for the deal itself — only for specific clauses like confidentiality and exclusivity; the contract only forms later.

Can I back out after signing?

If the LOI is properly non-binding, yes (subject to any binding exclusivity period).

Do I need a lawyer?

For simple deals you can draft it yourself, but have counsel review for larger transactions — courts sometimes find implied contracts in sloppy LOIs.

How long should it be?

2-5 pages typically. The goal is to capture key terms, not to replace the full contract.

LOI vs MOU vs term sheet?

They overlap heavily — LOIs often read as letters, MOUs as agreements, term sheets as bullet-points; the substance is what matters.

Browse all templates →

These are general templates, not legal or tax advice. Have anything unusual reviewed for your jurisdiction.

Continue drafting Top