A letter of intent (LOI) is a document that summarizes the understanding between two or more parties regarding a potential transaction. LOIs are commonly used when the parties are contemplating a merger-acquisition, joint venture, real estate purchase or lease, or other significant transaction. An LOI outlines the general terms of the deal, often with the stated understandings that the specific terms of any deal are subject to further negotiation, and that the parties are not obligated to complete a transaction. Because the parties will likely be disclosing confidential information—including the fact that they are having such discussions—the LOI should usually include confidentiality and nondisclosure terms.

In Pennsylvania, a Letter of Intent (LOI) is typically a non-binding document that outlines the preliminary understanding between parties who are considering a major transaction, such as a merger, acquisition, joint venture, or real estate deal. The LOI serves to express the parties' intent to negotiate in good faith and usually includes key terms and conditions of the proposed agreement. However, it is important to note that the LOI is generally not enforceable as a final contract, except for certain provisions that are meant to be binding, such as confidentiality and nondisclosure clauses. These clauses are crucial to protect the sensitive information exchanged during negotiations. Parties should be clear about which parts of the LOI are intended to be binding and which are not. It is advisable for parties to consult with an attorney when drafting an LOI to ensure that their interests are adequately protected and to avoid unintended legal obligations.