Letter of Intent

A Letter of Intent (LOI) is a document confirming the intent of a buyer and seller in a transaction or the intent of an investor to participate in a round of financing, though it is generally called a term sheet in this case (while an LOI is typically used in the acquisition context). An LOI will also usually contain the material terms of the transaction. By signing an LOI, both parties agree to begin the legal and due diligence process prior to the closing of the transaction.