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2.) Some buyers will want to skip the LOI and instead submit a full purchase contract. They figure, why should they pay their lawyer to draw up both documents. But a purchase contract requires a significant amount of time and attorneys fees to draft. Once the buyer has made this big investment in legal fees, it puts a lot of pressure on them that is detrimental to the negotiating process.

While the purposes of letters of intent will vary from situation to situation here are a few examples of why a letter of intent is used: To come up with and provide safeguards for the interested parties in the case of a potential deal falling apart.

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