Sign a letter of intent online

What an LOI is used for

A letter of intent sets out the main terms two parties expect to agree before the full contract is drafted. It is common in company acquisitions, commercial property, large supply deals, joint ventures and construction, where a contractor may be asked to start work before the main contract is signed.

It lets both sides check they agree on the essentials, such as price, structure and timetable, before spending money on lawyers and due diligence.

Binding and non-binding parts

Most LOIs are intended to be non-binding on the commercial terms but binding on a few procedural points. Courts look at the words used and the parties' conduct, so be explicit. A sentence such as 'Save for paragraphs 8 to 11, this letter is not legally binding' does more work than any heading.

The cautionary tale is Texaco v Pennzoil in the 1980s, where a Texas jury found an agreement in principle binding and awarded Pennzoil over $10 billion. In England, RTS Flexible Systems v Molkerei Alois Müller (2010) showed that parties can end up bound by a contract formed by conduct even when the paperwork was marked 'subject to contract'.

• Usually binding: exclusivity, confidentiality, costs, governing law.
• Usually non-binding: price, structure, conditions, timetable.
• Construction LOIs: often binding for a limited scope and capped amount, so the contractor is paid for early work.

Who signs and in what order

The party making the proposal, usually the buyer or investor, signs first and sends the letter; the other party countersigns to accept. Each signs through a director or officer.

If the LOI includes exclusivity, the countersignature date often starts the exclusivity clock, so the timestamp matters. The certificate of completion records the time of each signature in UTC.

Common mistakes

Not saying which clauses bind. Agreeing exclusivity with no end date. Acting on the LOI as if it were the contract, for example a contractor starting full works, then disagreeing about payment when the main contract never arrives. Letting the LOI run so long that the parties forget to sign the real agreement.

This is general information, not legal advice. On an acquisition or a construction project, have the LOI reviewed by a lawyer before signing.

How to sign an LOI in Sign PDF

Upload the letter and Sign PDF places the signature blocks from the closing lines, such as 'Yours faithfully' for the sender and 'Agreed and accepted' for the recipient. Sign your part in the editor, then send. Ask the assistant to 'add recipient initials beside paragraph 9' if you want the exclusivity clause acknowledged.

The recipient confirms a code from their email and signs. The sealed PDF and its certificate show both signatures and times, which matters if exclusivity is later disputed.