Letter of Intent Definition

A letter of intent is a document outlining a possible agreement between two parties. The letter of intent is circulated prior to executing a contract. A letter of intent usually resembles a contract but is frequently less formally structured. Letters of intent are used to hammer out difficult or complex transactions, to establish publically that contract negotiations are underway, and to provide various safeguards-such as confidentiality agreements-during contract negotiation. Letters of intent are also used during collegiate recruiting of athletes, academic applications, and disability proceedings. Although they may bear some binding provisions, they should not be confused with an actual contract.