Letter of Intent

Secure proof of interest from future customers.

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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?

You can customize the LOI by downloading it or using the Common Paper product.

What license is this agreement released under?

The Common Paper LOI is free to use and modify under CC BY 4.0.

Letter of Intent

This non-binding letter of intent (“LOI“) expresses our mutual excitement and intention to work together as detailed below. Final details, terms, and conditions will be as mutually agreed in a separate, binding agreement (“Definitive Agreement“). This LOI is meant to assist our negotiation of the Definitive Agreement. As such, this LOI is non-binding and no liability nor obligation is intended to be created between either of us, except for the portion called Confidentiality. This LOI does not require either of us to enter into a Definitive Agreement nor does it preclude the Definitive Agreement from including additional provisions.

Our current intentions are as follows:

Product

We, the Provider identified below, will make available [ enter name of the product ] (“Product“) to you, the Customer identified below.

Functionality
The Product will [ description of what the Product will do ].

Fees
You, the Customer, will pay us [ include description of fees ] for access to the Product.

Launch Date
We expect the Product to be ready on or around [ anticipated access / launch date ].

Confidentiality

[[ (1) Mutual: ]] We each have or may disclose information about our company that is confidential or proprietary in nature or that should be reasonably understood as confidential or proprietary due to its nature and the circumstances of its disclosure (“Confidential Information”). Neither of us will (a) use the other’s Confidential Information; nor (b) disclose the other’s Confidential Information to anyone else except as required by applicable law. In addition, we each will protect the other’s Confidential Information using at least the same protections that we use for our own similar information but no less than a reasonable standard of care. However, Provider may share this LOI and its terms with prospective investors or in the context of a potential corporate merger or acquisition.

[[ (2) Incorporating existing NDA: ]] We previously entered into a mutual non-disclosure agreement dated [ date of NDA ], which is incorporated by reference. This LOI and the details in it are each of our Confidential Information subject to the NDA. However, Provider may share this LOI and its terms with prospective investors or in the context of a potential corporate merger or acquisition.

[[ (3) One-way: ]] We, the Provider, have or may disclose information about our company that is confidential or proprietary in nature or that should be reasonably understood as confidential or proprietary due to its nature and the circumstances of its disclosure (“Confidential Information”). You, the Customer, will not (a) use our Confidential Information; nor (b) disclose our Confidential Information to anyone else except as required by applicable law. In addition, you will protect our Confidential Information using at least the same protections that you use for your own similar information but no less than a reasonable standard of care. For clarity, we, the Provider, may share this LOI and its terms with prospective investors or in the context of a potential corporate merger or acquisition.

[[ (4) Mutual (no disclosure to investors or acquirers): ]] We each have or may disclose information about our company that is confidential or proprietary in nature or that should be reasonably understood as confidential or proprietary due to its nature and the circumstances of its disclosure (“Confidential Information”). Neither of us will (a) use the other’s Confidential Information; nor (b) disclose the other’s Confidential Information to anyone else except as required by applicable law. In addition, we each will protect the other’s Confidential Information using at least the same protections that we use for our own similar information but no less than a reasonable standard of care.

[[ (5) Incorporating existing NDA (no disclosure to investors or acquirers): ]] We previously entered into a mutual non-disclosure agreement dated [ date of NDA ], which is incorporated by reference. This LOI and the details in it are each of our Confidential Information subject to the NDA.

By signing this LOI, each party acknowledges their intent as outlined in the LOI and agrees to the confidentiality terms.

PROVIDER:  [official company name]
CUSTOMER:  [official company name]
Signature
Print Name
Title
Contact Address
Date

Common Paper Letter of Intent free to use under CC BY 4.0.

The LOI, annotated

Non-binding

LOIs are intended to be informal and non-binding, which is different from traditional contracts. For more details on why this is non-binding, visit this page.

Except for the portion called Confidentiality

Although the LOI is non-binding, this makes the Confidentiality section binding.

Enter name of the product

Square brackets with text indicate a field you should fill in or customize before sending the agreement.

For this one, fill in the name of the product your customer is committing to using.

Functionality

This is optional. You can fill in details about the functionality of your Product or remove this section entirely.

Fees

This is optional. You can fill in details about how much you expect the customer to pay or remove this section entirely.

Launch Date

This is optional. If you have yet to launch your Product and want to commit to an anticipated launch date, fill in the details. Otherwise, remove this section entirely.

Confidentiality

There are 5 different options to address confidentiality. Select the one that works for your situation and delete the others.

Mutual

Once you’ve selected a confidentiality option, delete all other options. For the option you select, delete the [[ double brackets and the text between them ]].

This option gives mutual confidentiality protections written directly in the LOI, and with the ability to share the LOI with investors or for M&A discussions.

Incorporating existing NDA

This option incorporates an existing NDA and gives the ability to share the LOI with investors or for M&A discussions.

Date of NDA

If using this option, fill in the effective date of the signed NDA.

One-way

The option is a one-way (protective of Provider’s information) confidentiality obligations written directly in the LOI.

Mutual (no disclosure to investors or acquirers)

This option gives mutual confidentiality protections written directly in the LOI, without the explicit ability to share the LOI with investors or for M&A discussions.

Incorporating existing NDA (no disclosure to investors or acquirers)

This option incorporates an existing NDA but without the explicit ability to share the LOI with investors or for M&A discussions.

Free to use under CC BY 4.0

All Common Paper agreements are released under the Creative Commons CC BY 4.0 license, which enables you to use the agreements any way, as long as you leave in the attribution.