# Letter of intent (LOI)

**Letter of intent (LOI):** A letter of intent (LOI) is a largely non-binding document in which buyer and seller set out the key terms of a proposed practice sale, such as price, structure, timing and conditions, before definitive agreements are drafted.

A letter of intent (LOI) is a largely non-binding document in which buyer and seller set out the key terms of a proposed practice sale, such as price, structure, timing and conditions, before definitive agreements are drafted.

An LOI typically covers price and how it is paid (cash at close, earn-out, holdback, rollover equity), deal structure (asset or stock purchase), any working capital peg, the seller’s work-back, and exclusivity. Exclusivity and confidentiality clauses are often the binding parts. Have counsel review any LOI before signing.

Source: DDSIntel glossary, https://ddsintel.com/glossary/letter-of-intent

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