LOIs are beneficial to both the buyer and seller. The fundamental goal of the LOI is to confirm that a 'meeting of the minds' has been reached prior to both parties making the large investments of time, energy, and expense required to execute a Definitive Purchase Agreement (DPA), aka Asset Purchase Agreement (APA).
Confidentiality Agreement and Letter of Intent _ Two Steps to Creating a New Business Relationship. One of the largest dilemmas faced by anyone who is forming a new business idea is who they should disclose their concept to in order to bring it to commercial reality. Disclosure is generally to potential funders, future customers and in some instances to future suppliers.