A letter of intent is a written outline of the proposed terms of a business sale, such as price, structure and timeline, signed before the parties negotiate a full purchase agreement. Most of it is non-binding, meant to confirm both sides agree on the basics before spending money on due diligence, though a few sections, like confidentiality and exclusivity, are usually binding.
Why it matters
Signing a letter of intent usually means agreeing not to shop the business to other buyers while the deal is worked out.
General information, not legal or tax advice.