A purchase letter of intent (LOI) is an intention to purchase a seller’s products or services in a written form. The goal of the letter is to show that the buyer has serious intentions regarding purchasing a seller’s merchandise in the future. To make sure the seller will not be considering an offer for a long time, the buyer might include the deadline for accepting or declining an offer.
The parties might decide to make a letter non-binding with the intention to create a more comprehensive agreement in the future. But if agreed upon by the buyer and seller, the form might be legally binding which will bring it legal force and consequently provide legal protection for the parties.
LOIs to purchase differ by the object that is about to be bought. It is common to meet such types of letter of intent template:
A purchase order is a form sent from the buyer to the selling business with the goal of authorization of the product or service purchase. The form is aimed at describing the type and number of the products requested by the buyer. It should also provide the account details of the buyer for delivery of the requested items and the terms of payment. When a seller gets a purchase order, they should give approval of the transaction before it becomes a legally binding contract.
A purchase letter of intent should be a succinct document that describes only the main terms of the sale.
Step 1 – Effective date and subject
The buyer should start the purchase letter of intent with the effective date and subject that should describe the product (products) that is the object of the discussion.
Step 2 – Purpose
In the first paragraph, write down the purpose of the letter of intent. For instance, the buyer can write that the letter is meant to represent the basic terms of the purchase between the buyer and seller, and that the formal agreement may be created after the completion of this letter of intent.
Step 3 – Parties and Product
The name the buyer and the name of the seller should be put further and the name of the product/service the buyer intends to purchase should be provided in the letter of intent. Mention the quantity of the product (products) and the price per item if it s a countable product.
Step 4 – Purchase price and payment method
Specify the purchase price of the products/service and the purchase price after taxation. Then, indicate what payment method will be used by the buyer to pay the purchase price (check, money order, cash, etc.).
Step 5 – Dependence on financing
The buyer should state whether they need to obtain financing to make the purchase. If it is needed, the buyer should specify what conditions they should meet to get the financing.
Step 6 – Binding effect
The purchase letter of intent should indicate whether it is enforceable or not which should be agreed upon by the parties. If the letter of intent is non-binding, there should be a wording that it is constructed solely for the purpose of agreeing on the main terms of the future legally binding contract. If the letter of intent is binding, there is no need for the buyer and seller to create a purchase agreement.
Step 7 – Currency and governing law
The currency in which the payment will be made and the laws considered governing by the parties should be mentioned.
Step 8 – Acceptance
The second to the last thing in the letter should be a statement about what constitutes an acceptance of the letter of intent. Usually, it is signing the letter of intent by both the buyer and seller and returning a duplicate copy to the buyer. The section should also provide the date by which the copy should be returned.
Step 9 – Signatures
The last thing to do is to put signatures on the letter. Both the buyer and seller should sign the letter of intent and put their print names along with the date of signing.
If you need to get a LOI to purchase in just several minutes, it is possible with our online document builder. It will let you get a customized purchase letter by just answering a set of questions. The form you will get is easy to download and print.
From: Art for Happiness, LLC
689 Manor Ave.
Big Spring, TX 79720
April 4, 2021
To: Texas Art Supply
323 Harvard Road
Odessa, TX 79761
RE: Letter of intent to purchase goods
We take the opportunity to declare our intention to purchase some goods from your company. Our company is duly organized and exists under the laws of the State of Texas, based on its Articles of Incorporation dated April 1, 2021. The principal business address of our company is 689 Manor Ave. Big Spring, TX 79720. Our principal activities include paint-and-sip services for our customers.
In line with the above-stated, we, Art for Happiness, LLC, hereby confirm with all responsibility that we are willing and able to enter into a contract for the purchase of the following items, as specified below:
We understand that this letter of intent is a starting point for further negotiations and operates as a framework under which the transaction can proceed.
We look forward to working with you on the proposal, hopefully beneficial for both entities.
Supply Manager of the Art for Happiness, LLC