letter of intent

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Letter of intent

An assurance by a mutual fund shareholder that a certain amount of money will be invested monthly, in exchange for lower sales charges. In mergers, a preliminary merger agreement between companies after significant negotiations.

Letter of Intent

1. A document detailing a parent's wishes with regard to his/her minor children in the event of his/her death. For example, a letter of intent may state with whom the parent wants the children to live. While it is not a legal document, judges often use letters of intent along with other documents when determining the best interests of the children with regard to their future.

2. A document indicating a corporation's intent to undertake a merger or acquisition. A letter of intent outlines the details of the merger or acquisition, including the purchase price and whether it will be paid in cash, stock, and/or debt. It is important to note that a letter of intent it not legally binding and may not be enforced. However, an LOI shows that the company is serious in its intention and there may be reputational risk in not following it.

letter of intent

An agreement by a mutual fund shareholder to invest a specific sum over a defined period in order to qualify for reduced sales fees. The reduced fee may apply to an individual fund or to all the funds operated by an investment management group. Compare breakpoint. See also right of accumulation.

letter of intent (LOI)

A signed document between parties setting out the deal points on which they agree and leaving for later negotiation the minutia over which the lawyers will argue. In the absence of any limiting language in the LOI,it can be construed as a binding contract between the parties.Usually,however,the LOI will recite that it is only an expression of interest regarding the parties' mutual intent, that the parties have not reached an agreement regarding any terms or provisions of a contract,and the LOI is neither a contract,nor an offer capable of acceptance,nor evidence of a contract,but merely the current status of negotiations that might possibly lead to a contract.

References in periodicals archive ?
In addition to the potential benefits, letters of intent also pose many risks, not the least of which are the legal risks discussed separately below.
Where businesses are relying upon letters of intent, their terms should be considered carefully.
The tenants agreed that the strategy of obtaining the letters of intent for the space at 1500 Broadway was successful in securing concessions from O&Y for the renewal lease.
The article highlights only some of the relevant issues concerning letters of intent. Introduction In most M&A transactions, once it appears that there is a basis for a deal, the next step is for the parties to sign a letter of intent which is sometimes referred to as a memorandum of understanding or "heads of agreement." Usually the parties do not want the letter of intent (other than certain provisions which I will discuss below) to be binding.
The Norwegian oil company Statoil ASA said on Tuesday (22 March) that it had on behalf of a partnership including Norsk Hydro, Shell and Eni awarded letters of intent regarding long-term drilling rig contracts to Smedvig ASA and Transocean Inc.
The deadline for letters of intent is 9 October 2001, with final applications due 13 November 2001.
Olsen Energy ASA receives letters of intent for contract extensions(C)1994-2004 M2 COMMUNICATIONS LTD http://www.m2.com
The Norwegian offshore drilling contractor Smedvig ASA said on Friday (13 February) that it had received letters of intent regarding new drilling assignments from Chevron Texaco and ADTI.