In our experience, an LOI is a critical component in structuring a win_win transaction. We use them on virtually every deal. Here are the main benefits we see: More efficient use of time Proceeding with a clear understanding and agreement in principle. Trigger point for taking the next steps. More efficient use of time: Some people feel an LOI puts the cart before the horse.
The letter of intent sample can serve as a good guide on how to draft a letter of intent. Organizations can use this letter in certain situations including the following. They can use it as a safeguard or form of security in case their agreement does not go well. They can also use the letter to make the points of their agreement clear. The other situation would be to declare the parties involved in the agreement.