Concept · Business and metrics

Letter of intent

Also called: LOI, LOIs, letter of interest, memorandum of understanding, MOU

A short document that sets out what two parties intend to agree on, such as a purchase once a product exists. As a whole it is usually not binding, though some of its terms, such as confidentiality, can be. Common Paper publishes a free, standard template for a letter of intent to buy (Letter of Intent).

For example: A hospital signs a letter of intent saying it plans to buy a product when the product passes a security review. The founder shows the letter to investors as a sign of demand.

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