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 Idaho, a Letter of Intent (LOI) is generally considered a preliminary, non-binding document that outlines the basic terms and understanding between parties contemplating a significant transaction, such as a merger, acquisition, joint venture, or real estate deal. The LOI serves to facilitate further negotiations and to provide a framework for the final agreement. It typically includes provisions that the agreement is subject to further negotiation and that there is no obligation to complete the transaction unless a formal contract is entered into. Confidentiality and nondisclosure terms are often included to protect the sensitive information exchanged during negotiations. While the LOI itself is not usually legally binding in terms of the transaction's main points, certain clauses, like confidentiality, exclusivity, and governing law, can be enforceable. Parties should be cautious in drafting the LOI to avoid inadvertently creating a binding agreement, and it is advisable to consult with an attorney to ensure that the LOI accurately reflects their intentions and protects their interests.