How to write a letter of intent to purchase

Updated March 23, 2017

While a verbal agreement can be binding, any major sale should be finalised with a letter of intent indicating the terms of the agreement both parties have discussed for the purchase. A letter of intent with signatures from both parties can help both the buyer and the seller by providing proof in case the other back out, ensuring that neither party will end up in a bad situation. Even if you have no legal experience, a letter of intent to purchase is easy to write.

Write a short first paragraph that bluntly explains the nature of the agreement. A letter of intent is a business letter, not a letter between friends, and calls for clear, concise language. Write exactly who the agreement is between--name the two parties by name or business name--and what is being purchased.

Write a second paragraph that states the terms and conditions of the purchase, including information on refunds possible or not, and any specific obligations for the purchase for either party.

Write a third paragraph detailing the price of the item or service being purchased, and spelling out specifically what that price includes, who is paying, and who is being paid. If there is a third party involved in the finances they should be mention here, and their role in the purchase specified.

Write a fourth paragraph detailing a timeline of the purchase, such as when the product or service being purchased should be ready for use and the various stages--for example, for purchasing a house that has yet to be built, there should be a clear timeline from foundation to wiring.

Include spaces for both parties involved to sign and date the letter of intent at the bottom.


Do not use ambiguous terms, such as "in good faith," as a letter of intent should contain only concrete, factual statements for the safety of both parties involved.

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About the Author

Kara Page has been a freelance writer and editor since 2007. She maintains several blogs on travel, music, food and more. She is also a contributing writer for Suite101 and has articles published on eHow and Answerbag. Page holds a Bachelor of Music Education degree from the University of North Texas.