What Is Included In A Letter of Intent? As it pertains to the buying and selling of an early education company (childcare centers or schools), a Letter of Intent ("LOI") is a written statement expressing the intention of the participating parties to enter into a formal agreement. A LOI is not a formal agreement or a binding contract. The LOI serves the very important purpose of defining the agreed upon terms of a transaction so there are no misunderstandings between the parties, but it does not provide the detail found in a Purchase Sale Agreement.
Lawyers at the Coollawyer.com, explain the legal "paradox" inherent in the LOI, wherein the signing of an LOI, is often prone, not to bringing about less litigation, but more litigation, and put it this way: "Letters of Intent, legally, are the worst of all worlds. Writing a letter of intent is not to be taken lightly. In law, you either have a contract or you don't.