Quote from chief_editor on January 16, 2026, 7:15 am

LETTER OF INTENT

Date: [Date]

To:
[Party B Legal Name]
Registered Address: __________________

From:
[Party A Legal Name]
Registered Address: __________________

1. Purpose of This Letter

This Letter of Intent (“LOI”) sets out the preliminary commercial understanding between the Parties in relation to a proposed transaction involving the purchase, sale, supply, or development of [description of commodity, product, or project] (the “Proposed Transaction”).

This LOI is intended to outline the key commercial principles under which the Parties intend to proceed, subject to the negotiation and execution of a definitive agreement.

2. Description of Proposed Transaction

The Parties currently contemplate the following non-binding terms:

a) Product or Commodity: [description/specification]
b) Indicative Quantity or Volume: [quantity or capacity]
c) Delivery Location and Incoterms (if applicable): [Incoterms / location]
d) Indicative Price or Pricing Mechanism: [price basis or formula]
e) Expected Delivery Period or Project Timeline: [timeline]

All terms above are indicative only and subject to further negotiation.

3. Due Diligence

The completion of the Proposed Transaction is subject to the satisfactory completion of technical, commercial, financial, legal, and regulatory due diligence by each Party.

4. Definitive Agreement

The Parties acknowledge that the Proposed Transaction shall only become binding upon the execution of a definitive agreement, such as a Sales and Purchase Agreement or Supply Contract, containing detailed terms and conditions.

5. Exclusivity (If Applicable)

[Optional Clause]

For a period of [time period], the Parties may agree to negotiate the Proposed Transaction on an exclusive basis. This exclusivity shall not obligate either Party to conclude a definitive agreement.

6. Confidentiality

All information exchanged in connection with this LOI shall be treated as confidential and handled in accordance with any existing non-disclosure agreement between the Parties or, in the absence thereof, reasonable confidentiality standards.

7. Costs and Expenses

Each Party shall bear its own costs and expenses incurred in connection with this LOI, the Proposed Transaction, and any due diligence activities, unless otherwise agreed in writing.

8. Binding and Non-Binding Provisions

Except for Clauses relating to confidentiality, exclusivity (if applicable), governing law, and costs, this LOI is non-binding and does not create any obligation for either Party to complete the Proposed Transaction.

9. Governing Law

This LOI shall be governed by and construed in accordance with the laws of [Governing Law Jurisdiction].

10. No Legal Obligation

Nothing in this LOI shall be construed as creating a partnership, joint venture, or agency relationship between the Parties.

11. Term

This LOI shall remain valid for a period of [three (3) to six (6)] months from the date of this Letter, unless terminated earlier by written notice from either Party.

12. Entire Understanding

This LOI represents the entire understanding between the Parties regarding the Proposed Transaction and supersedes any prior discussions or correspondence.

If the foregoing accurately reflects your understanding, please confirm by signing below.

Yours sincerely,

For and on behalf of Party A

Signature: _______________________
Name: __________________________
Title: __________________________
Date: __________________________

Acknowledged and agreed:

For and on behalf of Party B

Signature: _______________________
Name: __________________________
Title: __________________________
Date: __________________________

Practical Notes

In commodity and industrial trade, an LOI is often used when parties have aligned on key commercial terms but are not yet ready to commit legally. It serves as a bridge between initial discussions and a definitive contract. Parties should pay particular attention to which provisions are intended to be binding.