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A letter of intent sent by mail is a written statement that one party plans to enter a deal, such as a purchase or a job, on stated terms. Most of it is non-binding, but parts like confidentiality can bind, so read every clause before signing.
This is general information, not legal advice.
A letter of intent, often shortened to LOI, sits between a handshake and a contract. It records that two sides are serious enough to put the main terms on paper and move toward a final agreement. A buyer might send one to a business seller, an employer might send one to a job candidate, or a tenant might send one to a landlord before a lease is drafted. The letter sets out the price range, the assets or role involved, the timeline, and the conditions that must be met before anyone signs the real contract.
Its main value is alignment. When both sides sign an LOI, they agree on the shape of the deal before lawyers spend weeks drafting a full agreement. It also gives each side a document to show a board, a lender, or an investor as proof that talks have moved past the casual stage. An LOI is not the deal itself, and it should never be treated as one.
| Part of an LOI | Usually binding? | What it means |
|---|---|---|
| Price and main terms | Usually not | A target for the final contract, not a promise to close |
| Confidentiality | Often yes | Shared deal details must stay private |
| Exclusivity or no-shop | Often yes | One side agrees not to talk to other buyers for a set time |
| Governing law | Often yes | Names which law applies to the LOI itself |
| Expenses | Often yes | States who pays costs if the deal falls apart |
| Closing conditions | Usually not | Lists what must happen before a final contract |
This is the trap in LOIs. A letter can state in bold letters that it is non-binding, and still contain clauses that a court will enforce. Confidentiality, exclusivity, and cost-sharing clauses are the usual binding ones, and they are often written in the same letter as the non-binding price terms. Some courts have also enforced an LOI as a whole when the language is too firm, for example when it says a party "shall" close rather than "intends" to close. Wording matters enormously here, which is why lawyers review LOIs before anyone signs.
If you receive an LOI, read the binding clause first. A well-drafted LOI has a paragraph that lists exactly which sections are binding and which are not. If that paragraph is missing or vague, treat the whole letter as risky and get advice before signing. Never sign an LOI on the assumption that "non-binding" in the title protects every sentence inside it.
Mail still carries weight for formal business correspondence, and a mailed LOI creates a clean paper record. Sending by certified mail in the United States or registered mail in Canada gives you a delivery record with a date, which matters when an exclusivity clock or a response deadline starts on receipt. A mailed original with wet signatures can also satisfy a counterparty, a board, or a lender that wants signed paper rather than a forwarded email chain.
Mail also forces a pause. An LOI sent by email can be signed in haste, while a mailed letter gives both sides time to read it properly. For a high-value deal, that pause is a feature, not a drawback. Keep a full copy of the signed letter and the mailing receipt, and note the delivery date, since deadlines in the LOI often run from that date.
A solid LOI names the parties, describes the transaction, states the proposed price or price range, lists key conditions such as financing or due diligence, sets a timeline for the final agreement, and states clearly which parts bind and which do not. It should also name an expiry date: a date after which the LOI lapses if no final agreement is signed. Without an expiry date, an old LOI can linger and confuse later talks.
Leave out anything you are not ready to stand behind. Even non-binding terms shape expectations, and walking back a stated price or timeline later can damage trust or trigger a dispute about good faith. If a term is still under discussion, say so in the letter rather than writing a firm number you may need to change.
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