This document is free to use or modify under CC BY 4.0. The document is available in the following formats.
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About this Common Paper document
What is a letter of intent or LOI?
A LOI is a short, friendly, and non-binding document that expresses a potential customer’s interest in establishing a business relationship. Often, the LOI outlines the benefits of the product or services with the aim of building trust and understanding.
When do people use an LOI?
An LOI is useful when parties are in the early stages of discussion and want to express their intent to enter into a business relationship in the future, whereas the CSA is used when parties are ready to commit to specific terms and need a legally binding agreement to govern their business interactions. Some companies use LOIs to validate demand for the product they are building, including with potential investors, while others use LOIs as a negotiation aid.
What does non-binding mean?
Aside from the section on confidentiality, the Common Paper LOI is non-binding. This means that the parties have no legal obligation to do anything specified in the letter. Put another way, either side can walk away at any time for any reason or no reason with no impact from having signed the LOI.
The section on confidentiality is legally-binding. Because an LOI is typically used in the early stages of negotiations, conversations between the parties may involve the exchange of confidential information. In order to maintain confidentiality, the Common Paper LOI allows you to incorporate an existing NDA or create confidentiality terms directly in the document.
Can I customize the LOI?
What license is this agreement released under?
The Common Paper LOI is free to use and modify under CC BY 4.0.