Definition: LOIs outline the essential terms of a transaction and are signed by the seller and buyer before due diligence is started.

See Also: Exclusivity , no-shop, go-shop , purchase agreement , NDA, due diligence.

Tips: Small business offers are made using an offer to purchase form, while offers for middle-sized companies are made using an LOI. An LOI is replaced by a purchase agreement upon the conclusion of due diligence.