A Letter of Intent is typically the first formal step in a sale process. It is a document that outlines the key business, legal, and tax terms before a binding agreement is drawn up.

Thank goodness they found your article.” Hanford, Calif., real estate attorney Ron Jones, who helped me with that earlier article, agreed with Anne. He explained the elements of a letter of intent.

While the majority are non-binding, the parties’ willingness to negotiate and execute a letter of intent demonstrates a preliminary commitment to the deal. 2. Confirms Material Terms.