{"id":8010,"date":"2026-08-03T11:00:00","date_gmt":"2026-08-03T16:00:00","guid":{"rendered":"https:\/\/www.bgs.com\/blog\/?p=8010"},"modified":"2026-07-31T17:26:40","modified_gmt":"2026-07-31T22:26:40","slug":"what-is-a-letter-of-intent-loi-why-is-it-important","status":"publish","type":"post","link":"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/","title":{"rendered":"What Is a Letter of Intent (LOI) & Why Is It Important?"},"content":{"rendered":"\n

A letter of intent (LOI) is an important document often used to initiate a business transaction. After some initial business discussions and general agreement on terms, the buyer will present an LOI to the seller to signal their serious commitment to doing business with them. It outlines preliminary terms of the agreement, defines expectations, and establishes points to be negotiated. An LOI is typically non-binding, but it plays a key role in setting the direction of the transaction. Therefore, professional legal counsel is critical for creating an LOI that sets up a successful business transaction.<\/p>\n\n\n\n

What Is a Letter of Intent (LOI) Used for?<\/h2>\n\n\n\n

A letter of intent can be used to accomplish many things in the early stages of a business transaction:<\/p>\n\n\n\n

  1. Announce the nature of a deal between two parties, such as a merger, acquisition, or joint venture.<\/li>
  2. Propose the basic structure of a deal, including the potential price, timeline, and conditions.<\/li>
  3. Define expectations and create transparency before finalizing the agreement.<\/li>
  4. Provide a framework for continuing negotiations.<\/li>
  5. Protect all parties with confidentiality agreements and exclusivity provisions.<\/li><\/ol>\n\n\n\n

    Why Writing a Letter of Intent (LOI) Requires Legal Counsel<\/h2>\n\n\n\n

    Although letters of intent generally aren\u2019t binding, the confidentiality and exclusivity provisions will be; the parties may also agree that certain other provisions are binding. An LOI may also include clauses related to fees, choice of law, or dispute resolution.<\/p>\n\n\n\n

    To ensure your business interests are protected from the earliest stages of a transaction, you should consult with a business attorney<\/a> experienced in this area. An attorney can review your LOI, add critical clauses, and clarify language that may be binding.<\/p>\n\n\n\n

    Even if an LOI doesn\u2019t contain binding clauses, it still sets the foundation for a business deal. A poorly written LOI can lead to unintended consequences, confusion, and a less-than-successful business transaction. So even if you don\u2019t think you need an attorney\u2019s help, it is always prudent to consult with one<\/a>.<\/p>\n\n\n\n

    Why You Shouldn\u2019t Use AI to Write a Letter of Intent (LOI)<\/h2>\n\n\n\n

    A letter of intent may be a preliminary, non-binding document, but that doesn\u2019t mean you don\u2019t need to take it seriously. On the contrary, an LOI defines the direction of the business transaction and establishes clear expectations for all parties involved. Businesses cannot afford to include unclear language, unintentional obligations, or inaccurate information in an LOI. Using artificial intelligence (AI) to write your LOI exposes your business to these risks and many others.<\/p>\n\n\n\n

    AI may be a convenient tool, but it is not a legal expert, nor is it an expert on your business. AI has been known to cite inaccurate or outdated information and even hallucinate information<\/a> in an effort to present the user\u2019s desired response. It is not trained to write or understand legally binding language. It doesn\u2019t know your business\u2019s history, goals, or expectations. Relying on AI to write a letter of intent is not only unwise\u2014it endangers your business.<\/p>\n\n\n\n

    Rely on Professional Business Attorneys to Create Your Letter of Intent (LOI)<\/h2>\n\n\n\n

    A well-structured letter of intent paves the way for a successful business transaction. In contrast, a poorly structured letter of intent can be disastrous for your business. Partnering with a trusted business attorney<\/a> to create your letter of intent sets you up for success and protects your critical interests.<\/p>\n\n\n\n

    At Barna, Guzy & Steffen<\/a>, our business attorneys know how to craft a letter of intent that clearly defines your expectations, outlines necessary provisions, communicates key information, and effectively sets the stage for your transaction. With a history of legal excellence beginning in 1938, Barna, Guzy & Steffen is trusted by business owners and professionals throughout Minnesota and beyond.<\/p>\n\n\n\n

    Contact us today<\/a> to request personalized legal assistance from a business attorney.<\/p>\n\n\n\n

    For more information on how to complete a business transaction, read our blog series:<\/p>\n\n\n\n

    Buying an Operating Business \u2013 Step 1. Know Your Seller, Know the Process.<\/a><\/p>\n\n\n\n

    Buying an Operating Business \u2013 Step 2.\u00a0 Make sure your purchase agreement is well developed and covers post-closing matters!<\/a><\/p>\n\n\n\n

    Buying an Operating Business \u2013 Step 3.\u00a0 Closing Day is upon us! And what happens after that?<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    A letter of intent (LOI) is an important document often used to initiate a business transaction. After some initial business discussions and general agreement on terms, the buyer will present an LOI to the seller to signal their serious commitment to doing business with them. It outlines preliminary terms of the agreement, defines expectations, and establishes points to be negotiated. An LOI is typically non-binding, but it plays a key role in setting the direction of the transaction. Therefore, professional legal counsel is critical for creating an LOI that sets up a successful business transaction. What Is a Letter of Intent (LOI) Used for? A letter of intent can be used to accomplish many things in the early stages of a business transaction: Announce the nature of a deal between two parties, such as a merger, acquisition, or joint venture. Propose the basic structure of a deal, including the potential price, timeline, and conditions. Define expectations and create transparency before finalizing the agreement. Provide a framework for continuing negotiations. Protect all parties with confidentiality agreements and exclusivity provisions. Why Writing a Letter of Intent (LOI) Requires Legal Counsel Although letters of intent generally aren\u2019t binding, the confidentiality and exclusivity provisions will be; the parties may also agree that certain other provisions are binding….<\/p>\n","protected":false},"author":2,"featured_media":8012,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[7],"tags":[71,275,274],"coauthors":[54],"yoast_head":"\nWhat Is a Letter of Intent (LOI) & Why Is It Important?<\/title>\n<meta name=\"description\" content=\"A letter of intent sets the stage for a successful business transaction by defining expectations and outlining basic terms of the agreement. Learn more.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Is a Letter of Intent (LOI) & Why Is It Important?\" \/>\n<meta property=\"og:description\" content=\"A letter of intent sets the stage for a successful business transaction by defining expectations and outlining basic terms of the agreement. Learn more.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/\" \/>\n<meta property=\"og:site_name\" content=\"Barna, Guzy & Steffen, LTD.\" \/>\n<meta property=\"article:published_time\" content=\"2026-08-03T16:00:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-07-31T22:26:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.bgs.com\/blog\/wp-content\/uploads\/2026\/07\/letter-of-intent-scaled.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1623\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Carole Clark Isakson\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Carole Clark Isakson\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/\",\"url\":\"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/\",\"name\":\"What Is a Letter of Intent (LOI) & Why Is It Important?\",\"isPartOf\":{\"@id\":\"https:\/\/www.bgs.com\/blog\/#website\"},\"datePublished\":\"2026-08-03T16:00:00+00:00\",\"dateModified\":\"2026-07-31T22:26:40+00:00\",\"author\":{\"@id\":\"https:\/\/www.bgs.com\/blog\/#\/schema\/person\/8ed7e2dec97e9142adb36ed7a1e38dd2\"},\"description\":\"A letter of intent sets the stage for a successful business transaction by defining expectations and outlining basic terms of the agreement. Learn more.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.bgs.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"What Is a Letter of Intent (LOI) & Why Is It Important?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.bgs.com\/blog\/#website\",\"url\":\"https:\/\/www.bgs.com\/blog\/\",\"name\":\"Barna, Guzy & Steffen, LTD.\",\"description\":\"Attorneys at Law\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.bgs.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.bgs.com\/blog\/#\/schema\/person\/8ed7e2dec97e9142adb36ed7a1e38dd2\",\"name\":\"Barna, Guzy & Steffen, Ltd.\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.bgs.com\/blog\/#\/schema\/person\/image\/0babcb214f26cc306abf91b760d8dc38\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/afdfdb8b4c79821fc8efbe51db325f08?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/afdfdb8b4c79821fc8efbe51db325f08?s=96&d=mm&r=g\",\"caption\":\"Barna, Guzy & Steffen, Ltd.\"},\"url\":\"https:\/\/www.bgs.com\/blog\/author\/bgs\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What Is a Letter of Intent (LOI) & Why Is It Important?","description":"A letter of intent sets the stage for a successful business transaction by defining expectations and outlining basic terms of the agreement. Learn more.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/","og_locale":"en_US","og_type":"article","og_title":"What Is a Letter of Intent (LOI) & Why Is It Important?","og_description":"A letter of intent sets the stage for a successful business transaction by defining expectations and outlining basic terms of the agreement. Learn more.","og_url":"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/","og_site_name":"Barna, Guzy & Steffen, LTD.","article_published_time":"2026-08-03T16:00:00+00:00","article_modified_time":"2026-07-31T22:26:40+00:00","og_image":[{"width":2560,"height":1623,"url":"https:\/\/www.bgs.com\/blog\/wp-content\/uploads\/2026\/07\/letter-of-intent-scaled.jpeg","type":"image\/jpeg"}],"author":"Carole Clark Isakson","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Carole Clark Isakson","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/","url":"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/","name":"What Is a Letter of Intent (LOI) & Why Is It Important?","isPartOf":{"@id":"https:\/\/www.bgs.com\/blog\/#website"},"datePublished":"2026-08-03T16:00:00+00:00","dateModified":"2026-07-31T22:26:40+00:00","author":{"@id":"https:\/\/www.bgs.com\/blog\/#\/schema\/person\/8ed7e2dec97e9142adb36ed7a1e38dd2"},"description":"A letter of intent sets the stage for a successful business transaction by defining expectations and outlining basic terms of the agreement. Learn more.","breadcrumb":{"@id":"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.bgs.com\/blog\/2026\/08\/03\/what-is-a-letter-of-intent-loi-why-is-it-important\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.bgs.com\/blog\/"},{"@type":"ListItem","position":2,"name":"What Is a Letter of Intent (LOI) & Why Is It Important?"}]},{"@type":"WebSite","@id":"https:\/\/www.bgs.com\/blog\/#website","url":"https:\/\/www.bgs.com\/blog\/","name":"Barna, Guzy & Steffen, LTD.","description":"Attorneys at Law","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.bgs.com\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.bgs.com\/blog\/#\/schema\/person\/8ed7e2dec97e9142adb36ed7a1e38dd2","name":"Barna, Guzy & Steffen, Ltd.","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.bgs.com\/blog\/#\/schema\/person\/image\/0babcb214f26cc306abf91b760d8dc38","url":"https:\/\/secure.gravatar.com\/avatar\/afdfdb8b4c79821fc8efbe51db325f08?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/afdfdb8b4c79821fc8efbe51db325f08?s=96&d=mm&r=g","caption":"Barna, Guzy & Steffen, Ltd."},"url":"https:\/\/www.bgs.com\/blog\/author\/bgs\/"}]}},"_links":{"self":[{"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/posts\/8010"}],"collection":[{"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/comments?post=8010"}],"version-history":[{"count":2,"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/posts\/8010\/revisions"}],"predecessor-version":[{"id":8014,"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/posts\/8010\/revisions\/8014"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/media\/8012"}],"wp:attachment":[{"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/media?parent=8010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/categories?post=8010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/tags?post=8010"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.bgs.com\/blog\/wp-json\/wp\/v2\/coauthors?post=8010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}