A letter of intent (LOI) sets out the key terms on which parties intend to do a deal, before the formal contract is signed. Most LOIs are non-binding except for specific provisions (exclusivity, confidentiality, costs). Be careful — some LOIs can inadvertently create binding obligations.

• Clearly state which parts are binding and which are non-binding
• Binding provisions: typically exclusivity, confidentiality, costs allocation
• Conditional contracts: LOIs can become binding if conditions are met
• Property purchases: memorandum of sale serves a similar purpose
• Subject to contract: phrase signals non-binding intent in UK law

Legal reference: Contract law — offer and acceptance; Harvey v Facey [1893]; Baird Textile Holdings v Marks & Spencer [2001]