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Note that the definitions are not too far apart, but the documents themselves are. The biggest difference is a Purchase Offer is a formal legal document, that once signed by both parties becomes a legal and binding agreement. If you are working with a real estate agent or broker, this is usually the document they will have you sign if you are interested in placing an offer on a property.

4. LOI as a Source or Promoter of Undue Litigation. Aside from the legal problem of the ambiguity and uncertainty inherent in LOI, there is yet another major problem inherent in the document, from a legal standpoint. Namely, precisely because the LOI is basically ambiguous and non_definitive by nature, the document often easily lends itself to different interpretations and understandings at the hands of different parties (or even the courts), and thus lends itself, in turn, to being a fertile source for undue litigation and legal contests for those involved with the use of that document in their transactions.

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