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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.

Many individuals will use the terms Letter of Intent, Memorandum of Understanding, and Term Sheet interchangeably, however there are slight, mainly style, differences. Memorandum of Understanding (MOU): The main difference between the MOU and LOI is the nature of the signatories. While two parties are involved in a LOI, a MOU can involve more than two parties. Additionally, while a letter of intent needs only the party which proposes the agreement to be a signatory, a MOU implies that all the parties involved have to be signatories.

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