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 Montana, 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 express the parties' intention to negotiate in good faith and often includes terms that are subject to further negotiation. It is important to note that while the LOI itself is typically not legally binding regarding the main transaction, certain provisions within it, such as confidentiality and nondisclosure clauses, can be enforceable. Parties should be clear about which parts of the LOI are intended to be binding. In Montana, as in other jurisdictions, the enforceability of an LOI depends on the language used and the intent of the parties. If the parties wish to ensure that they are not legally bound to complete the transaction, they should explicitly state this in the LOI. An attorney can provide guidance on drafting an LOI to ensure it reflects the parties' intentions and complies with Montana law.