When entering into a business agreement with another party, it is important to have a clear understanding of the intentions of both parties. One way to achieve this clarity is by drafting an agreement of intent, which outlines the goals and objectives of the parties before entering into a formal contract. In this article, we’ll take a closer look at what an agreement of intent is and provide a sample that can help guide you through the process.

What is an Agreement of Intent?

An agreement of intent, often referred to as a letter of intent, is a document that outlines the intentions of two or more parties. It is a preliminary document that is used to establish a framework for a future transaction, such as a merger, acquisition, or joint venture.

The purpose of an agreement of intent is to help the parties involved understand the goals, objectives, and expectations of the transaction. It provides a roadmap for the negotiation and drafting of a formal contract by outlining the major terms and conditions of the proposed deal.

An agreement of intent is not a binding agreement and does not create a legally enforceable contract. It is simply a statement of intent that helps the parties move forward in good faith and with a clear understanding of what is expected of each other.

Sample Agreement of Intent

[Name of company A]

[Address of company A]

[City, State, Zip Code]


[Name of company B]

[Address of company B]

[City, State, Zip Code]

Dear [Name of company B],

This letter serves as an agreement of intent between [Name of company A] and [Name of company B] with respect to [Nature of the transaction]. The purpose of this letter is to outline the parties` intentions and establish a framework for the transaction.

1. Parties: The parties to this agreement of intent are [Name of company A] and [Name of company B].

2. Nature of the Transaction: The parties intend to enter into a [Nature of the transaction] transaction, which may include, but is not limited to, the following:

a. [Description of the transaction];

b. [Description of the consideration];

c. [Description of any contingencies];

d. [Description of any necessary approvals];

e. [Description of the timeline].

3. Confidentiality: The parties acknowledge that the information exchanged during the course of negotiations and discussions will be confidential and proprietary and may not be disclosed to any third party without prior written consent.

4. Exclusivity: The parties agree to negotiate exclusively with each other regarding the transaction outlined in this agreement of intent.

5. Governing Law: This agreement of intent shall be governed by and construed in accordance with the laws of the [State where the transaction will take place].

6. Termination: This agreement of intent shall terminate upon the earlier of (i) execution of a definitive agreement for the transaction, (ii) mutual written agreement between the parties, or (iii) termination by either party upon written notice to the other.

If the foregoing meets with your approval, please sign and return one copy of this letter, which will serve as evidence of our agreement of intent.


[Name of company A]

By: __________________________

Authorized Signatory

Accepted and Agreed:

[Name of company B]

By: __________________________

Authorized Signatory


An agreement of intent is an important document that helps to establish a framework for a future business transaction. While it is not legally binding, it is an essential step in the negotiation and drafting of a formal contract. The sample agreement of intent provided above can serve as a helpful guide for parties looking to establish such an agreement. By setting out the goals and objectives of the parties at the outset of negotiations, an agreement of intent can help ensure that all parties involved are on the same page and working towards a common goal.