What does a Letter of Intent typically indicate?

A Letter of Intent (LOI) typically indicates an intention to accept a tender subject to certain conditions. This document is often used in the initial stages of a negotiation process and outlines the preliminary understanding between the parties regarding the terms of the agreement. The LOI signifies that the parties are willing to move forward with negotiations and enter into a formal contract, but it also points out that there are specific conditions that must be met before a final agreement can be reached.

This aspect of outlining intentions while still acknowledging that certain requirements must be fulfilled is crucial in commercial contracting. It helps create a framework for moving forward, while allowing both parties to ensure that their interests are secured and their conditions are respected. The nuanced nature of an LOI distinguishes it from other legal documents such as a formal contract or an unconditional acceptance of a tender, both of which imply a level of commitment and finality that does not exist in a Letter of Intent.