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A Letter of Intent is a written document that outlines a preliminary agreement between two parties regarding the terms of a potential purchase or other transaction. The two parties can settle on certain terms while agreeing to continue to negotiate the other terms and details of the transaction before actually signing a purchase agreement.

These documents are similar and are often used interchangeably. While they vary a bit from each other, they are used for the same purpose which is to show intent and an agreement to agree. Most are considered "nonbinding" unless the wording is included to make it binding.

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