Letters of intent precede legally binding documents, but are agreed upon by both parties.
Legally binding agreements can be daunting to compose and can often lead to uncertainty because of the pressure of legal documentation. Letters of intent serve as precursors to legal contracts by outlining the major points of an upcoming agreement without being legally binding. With letters of intent, both parties are secure in the basics of their agreement and more willing to trust in the terms of a hard legal contract.
Business Letters of Intent
When a business is up for sale, letters of intent between the buyer and seller show serious intent on the part of the buyer and make both parties more comfortable with the deal. These letters outline the major terms of the purchase or merger including price, payment amounts, description of assets to be sold and planned date of contract closure. Letters of intent also support the buyer when seeking financial support for the purchase. Investors are inclined to look favorably on potential investments that already hold a letter of intent, which shows them to be serious about the future deal.
Buyer and Seller Letters of Intent
Letters of intent are used in business negotiations between buyers and suppliers, whether they represent small businesses or large corporations. In this context, letters of intent precede the final purchase agreement by serving as an initial agreement between the buyer and seller. Both parties can outline the major terms of the upcoming agreement, including delivery and handling procedures, inventory controls, allocation of quality control responsibility and length of the partnership to mutual agreement.
Family Letters of Intent
These familial letters of intent most often act as parental wills for families with small children. Here parents dictate wishes for their children should they become unable to care for their children. A family letter of intent for a child's future includes the current age, status and future wishes for the child's well being, including family members who will gain custody or funds for the child's future. While these letters are not as legally binding as wills are, they are guides for the child's lawyers and caretakers if the parents become incapacitated.
Academic Letters of Intent
When applying for graduate or doctoral degree programs, admissions committees require academic letters of intent, often referred to as admissions essays. These letters outline the desired area of study, why the applicant wants to study the topic, experience in the given discipline and future career plans. These letters are a large part of the admissions review process and are used to shed light on the applicant as a scholar and a person. Good academic letters of intent can be the difference between graduate school acceptance and denial.
National Letters of Intent
When recruiting and signing student athletes to university sport agreements, the NCAA uses national letters of intent. These letters agree that the recruited student is able to receive financial aid for one year if they agree to attend the university or college institution for the same period. This agreement prevents any other institution from courting or recruiting the athlete and ensures the students participation on the agreed institution's sports team. With these letters, the student is guaranteed a place at the school while the school is guaranteed the student's extracurricular participation.
