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 Wisconsin, 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 key points of the proposed deal, indicating the intention to negotiate in good faith and often includes terms that are subject to further negotiation. While the LOI itself does not usually create a legal obligation to complete the transaction, certain clauses within it, such as confidentiality and nondisclosure agreements, can be legally binding. Parties should be cautious to clearly state which parts of the LOI are intended to be binding or non-binding. Wisconsin courts will generally look at the language of the LOI and the context of the negotiations to determine the enforceability of its terms. It is advisable for parties to consult with an attorney when drafting or signing an LOI to ensure that their rights and interests are adequately protected and to understand the implications of the LOI's terms.