letter of intent
Definition
A letter from one company to another acknowledging a willingness and ability to do business. A letter of intent is most often issued as acknowledgment of the fact that a merger between companies or an acquisition is being considered seriously. Sometimes, a letter of intent may also be issued by a mutual fund shareholder to indicate that he/she would like to invest certain amounts of money at certain specified times. In exchange for signing a letter of intent, the shareholder would often qualify for reduced sales charges. A letter of intent is not a contract and cannot be enforced, it is just a document stating serious intent to carry out certain business activities.
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Related terms:
letter security
'letter of intent' appears in the definitions of these other terms on BusinessDictionary.com:
letter of intent (LOI), letter security
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