LOI (letter of intent)

LOI (letter of intent) — the pre-contract document that states the intended price, structure, and timeline, and — its real function — grants an exclusivity window during which the seller opens the books and stops shopping the deal. Mostly non-binding except for exclusivity and confidentiality. The buyer’s discipline: never start paid diligence without one, and never let its price survive contact with evidence — the LOI number is a hypothesis the diligence tests.

First used in: 4.2 · Buying cash flow: acquisition I