Offer to Purchase Or Letter of Intent. Both terms are used to describe an offer made to purchase a business. An over_simplification of the definition of both documents is: An Offer to Purchase is usually written in contract form and defines the price, terms and conditions of the sale, and is usually accompanied by an earnest money deposit. A Letter of Intent (LOI) is usually written in letter form and also defines the price and the terms and conditions but usually doesn't call for an earnest money deposit.
Build a list of things that you will be addressing in the Purchase Offer and decide how you want each of them handled. Now you will not be able to cover EVERY scenario but you will be much further ahead (and prepared) when it comes to crunch time. What do you do then? Present the offer to the seller. Make sure you have an ending day and time for your offer to expire. You do NOT want the seller thinking this over for too long.