A letter of intent is a document which outlines an agreement between two odd parties before finalizing the agreement. It may be related to purchase  ... more>>of shares and assets or any other transaction aimed at closing large financial deals. LOI may or may not bind the parties depending upon the provisions of negotiations, whether in good faith or for exclusive rights. A letter of intent describes the history, current status and mutual expectations of the parties. Even though LOI is not legally enforceable and has certain amount of uncertainty attached with it, it is recommended to be employed in certain circumstances. As the name suggests, it acts as the face of the negotiating parties since it can explicitly interpret the various aspects related with a deal. The significance of a LOI lies in the blueprint of the transaction that specifies the key points of a deal. It mirrors an official declaration of negotiation by parties in regard with mergers and joint ventures. It can be treated as a safeguard for the stakeholders to prevent the deals from collapsing during negotiations. It spells out the obligations and rights of the borrower and therefore is practical and appropriate in orientation. Quite diverse in its application, a letter of intent can be applied to almost every social issue, be it financial, educational or any other.

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