Proceeding with a clear understanding and agreement in principle: The key elements of the LOI should be negotiated beforehand and can be used as a guideline to prepare the purchase agreement. It should state that, if all information during due diligence confirms what was represented, that the buyer intends to complete the purchase under certain conditions. The key elements should include:
Letters of intent are important in business relationships for they have many uses. For example, they are a form of proof to investors who want to know about the deals that the company has signed. They can get information on current business relationships.