A letter of intent (in English letter of intent or LOI or "Term Sheet") is a document that describes an agreement between two or more parties, which contains commitments that can later be formalized through a contract.[1]​ The concept is similar to the so-called "Bases of Agreement".[2]​ These agreements can be: Goods Purchase Agreements, Share Purchase Agreements, Joint Venture Agreements and other types of Agreements that have the objective agree on large-scale financial deals.[3]​.

Letters of intent are similar to written contracts, but are generally not binding on the parties as a whole. However, numerous Letters of Intent have provisions that are enforceable, such as confidentiality agreements, an agreement that it is negotiated in good faith, or "stand-still" or "no-shop" clauses that establish exclusive rights during the negotiation.[3]​ A letter of intent can also be interpreted as binding between the parties if its content closely resembles that of a formal contract.[4]​.

The most common reasons for using a letter of intent are:[5]​.

When two parties are about to begin a collaboration, the first step for them is to define the details. You don't want to close a deal without knowing what to expect, what your role will be, and the overall structure. This is where the letter of intent (LOI) comes into play.[9]​.

In the academic field, the letter of intent, also often called a statement of intent, is part of the admission process to certain graduate programs.[10]​[11]​[12]​ These letters often play a key role in the decision of admission committees, which seek to understand the applicant's academic and professional objectives and their suitability for the program. This document, similar to a cover letter for a job application, statement of intent, or introductory essay, typically describes the candidate's academic journey, their passion for their chosen area of ​​study, and how the specific master's program will help them achieve their career goals.

Possible disadvantages of using an LOI may include:.