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In most cases, LOIs are not legally binding although many could contain specific provisions that are binding, such as covenants to negotiate in good faith, no_shop or standstill provisions (exclusive rights to negotiate, often coupled with earnest money deposits), and Non_Disclosure Agreements (NDA).

There _ we got that out of the way! OK. Now let's look at when to use a Letter of Intent vs. a Purchase Offer. I am specifically going to address this when looking at buying an apartment building or commercial real estate. The standard contract used when purchasing real estate is called a Purchase Offer, or a Purchase and Sale Agreement. You probably used this to buy your own house or condo.

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