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 New Mexico, a Letter of Intent (LOI) is typically a non-binding document that outlines the preliminary understanding between parties who are considering entering into a major transaction such as a merger, acquisition, joint venture, or real estate deal. The LOI serves to summarize the main points of a proposed deal, indicating the parties' intentions to negotiate in good faith and often includes terms related to confidentiality to protect any sensitive information exchanged during negotiations. While the LOI itself does not usually create a legal obligation to proceed with the transaction, certain clauses, such as confidentiality and exclusivity, may be legally binding. It is important for parties in New Mexico to clearly state which parts of the LOI, if any, are intended to be binding. If the parties wish to make the terms of the LOI enforceable, they must express this intention explicitly within the document. As with any legal document, it is advisable for parties in New Mexico to consult with an attorney to ensure that the LOI accurately reflects their understanding and protects their interests.