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A Letter of Intent (LOI) on the other hand, is generally used as a "starting point" of discussion when purchasing real estate. It is a great tool to use to begin discussions, and usually is followed up with a formal Purchase and Sale Agreement.

Lawyers at the Coollawyer.com, explain the legal "paradox" inherent in the LOI, wherein the signing of an LOI, is often prone, not to bringing about less litigation, but more litigation, and put it this way: "Letters of Intent, legally, are the worst of all worlds. Writing a letter of intent is not to be taken lightly. In law, you either have a contract or you don't.

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