Letter of intent

Common reasons for using a letter of intent include: • allowing parties to sketch out fundamental terms quickly before expending substantial resources on negotiating definitive agreements, finalizing due diligence, pursuing third-party approvals and other matters The potential downsides to using a LOI may include: • The parties may engage in protracted negotiations on only a subset of the terms of a deal • Management time and focus may be diverted • Alternative opportunities may be missed and markets may move against the parties during negotiations • Parties may reduce their lack of a workable deal framework into a LOI, with a hope of making progress later • Public disclosure obligations may be inadvertently triggered • The risk of leaks, exacerbated by the desire of some to tout the LOI to the world, or shop it to other parties. ==Specific examples==

In academia, a letter of intent, also often referred to as a statement of intent, is part of the admissions process of a particular academic program in graduate school. These letters often act as a pivotal decider for admission committees looking to understand an applicant's academic and professional goals, and their fit within the program. The document, akin to a cover letter for job applications, a statement of purpose, or an application essay, typically outlines an applicant's academic journey, their passion for the chosen field of study, and how the specific graduate program will help them achieve their career goals. In education in the United States, letters of intent are also frequently reached between high school senior athletes and colleges/universities, for the reservation of athletic scholarships for the athletes upon graduation from high school. School administrators in secondary education often require a letter of intent before approving the formation of a student club. In real estate, in cases where the real property in question is not listed on a multiple listing service, there may not be an easy way to notify the owner of the property and other interested parties of intent to purchase. Often it is necessary to officially begin the process of a purchase, and allow all peripheral interested parties to begin any other processes, with a letter of intent. For example, a multimillion-dollar loan for a commercial property may require a letter of intent before a financial institution will allow personnel to spend time working on said loan necessary for the completion of the sale. The same may be followed at the time of purchase by any company. A tenant and landlord may sign a letter of intent prior to signing a lease agreement to stipulate rental rates and all regulations of the future tenancy. In the solicitation of US government grants, a letter of intent is highly encouraged, but it is not required or binding, and does not enter into the review of a subsequent application. The information that it contains allows agency staff to estimate the potential workload and plan the review. In the UK construction industry, it has been noted that "a significant element" within the industry appears to be "content to have their commercial and legal relationships defined on the basis of a letter of intent rather than by clear and definite contracts", as a consequence of which problems "often arise" in relation to liability. Ampleforth Abbey Trust successfully sued project management firm Turner & Townsend in 2012 when the latter engaged a construction company to build residential accommodation for the Abbey's students, relying on a series of letters of intent instead of a formal contract. The Abbey's position was undermined in the absence of a contract, and Turner & Townsend had breached their duty of care in leaving the trust exposed without contractual protection. ==See also==