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Common Paper Letter of Intent

Common Paper's non-binding letter of intent between a provider and a customer: the product, what it does, fees, launch date and five confidentiality options.

By Common PaperUpdated
  • letter of intent
  • LOI
  • early customers
  • Common Paper
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About this document

A letter of intent (LOI) is a short, mostly non-binding letter in which two companies write down a deal they plan to make before they sign the full contract. This is Common Paper's Letter of Intent, shown word for word as Common Paper publishes it, without a version number.

Use the Common Paper Letter of Intent when a customer plans to buy a product you are still building, and you want a signed record of the product, what it will do, the fees and the launch date. Y Combinator's Letter of Intent (LOI) to Purchase is written from the customer to you instead. Only the confidentiality section binds either side, so the letter is a signal of interest, not a purchase commitment.

How to fill it in

  1. Describe the product and fees. Fill in the product name, what it will do, the fees the customer expects to pay and the expected launch date.
  2. Choose one confidentiality option. Keep one of the five options and delete the other four. If you plan to show the letter to investors or buyers, avoid the two options marked no disclosure to investors or acquirers.
  3. Sign as provider and customer. Add each company's official name, and have a person who can speak for each company sign, print their name and title, and add a contact address and date.
Common Paper Letter of Intent

Letter of Intent

This non-binding letter of intent ("LOI") expresses our mutual excitement and intention to work together as detailed below. Final details, terms, and conditions will be as mutually agreed in a separate, binding agreement ("Definitive Agreement"). This LOI is meant to assist our negotiation of the Definitive Agreement. As such, this LOI is non-binding and no liability nor obligation is intended to be created between either of us, except for the portion called Confidentiality. This LOI does not require either of us to enter into a Definitive Agreement nor does it preclude the Definitive Agreement from including additional provisions.

Our current intentions are as follows:

Product

We, the Provider identified below, will make available [ enter name of the product ] ("Product") to you, the Customer identified below.

Functionality

The Product will [ description of what the Product will do ].

Fees

You, the Customer, will pay us [ include description of fees ] for access to the Product.

Launch Date

We expect the Product to be ready on or around [ anticipated access / launch date ].

Confidentiality

Mutual: We each have or may disclose information about our company that is confidential or proprietary in nature or that should be reasonably understood as confidential or proprietary due to its nature and the circumstances of its disclosure ("Confidential Information"). Neither of us will (a) use the other's Confidential Information; nor (b) disclose the other's Confidential Information to anyone else except as required by applicable law. In addition, we each will protect the other's Confidential Information using at least the same protections that we use for our own similar information but no less than a reasonable standard of care. However, Provider may share this LOI and its terms with prospective investors or in the context of a potential corporate merger or acquisition.

Incorporating existing NDA: We previously entered into a mutual non-disclosure agreement dated [ date of NDA ], which is incorporated by reference. This LOI and the details in it are each of our Confidential Information subject to the NDA. However, Provider may share this LOI and its terms with prospective investors or in the context of a potential corporate merger or acquisition.

One-way: We, the Provider, has or may disclose information about our company that is confidential or proprietary in nature or that should be reasonably understood as confidential or proprietary due to its nature and the circumstances of its disclosure ("Confidential Information"). You, the Customer, will not (a) use our Confidential Information; nor (b) disclose our Confidential Information to anyone else except as required by applicable law. In addition, you will protect our Confidential Information using at least the same protections that you use for your own similar information but no less than a reasonable standard of care. For clarity, we, the Provider, may share this LOI and its terms with prospective investors or in the context of a potential corporate merger or acquisition.

Mutual (no disclosure to investors or acquirers): We each have or may disclose information about our company that is confidential or proprietary in nature or that should be reasonably understood as confidential or proprietary due to its nature and the circumstances of its disclosure ("Confidential Information"). Neither of us will (a) use the other's Confidential Information; nor (b) disclose the other's Confidential Information to anyone else except as required by applicable law. In addition, we each will protect the other's Confidential Information using at least the same protections that we use for our own similar information but no less than a reasonable standard of care.

Incorporating existing NDA (no disclosure to investors or acquirers): We previously entered into a mutual non-disclosure agreement dated [ date of NDA ], which is incorporated by reference. This LOI and the details in it are each of our Confidential Information subject to the NDA.

By signing this LOI, each party acknowledges their intent as outlined in the LOI and agrees to the confidentiality terms.

PROVIDER: [official company name]

CUSTOMER: [official company name]

Signature

Print Name

Title

Contact Address

Date

Common Paper Letter of Intent free to use under CC BY 4.0.

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Frequently asked questions

Is a letter of intent legally binding?

Usually not, except for the parts it calls binding. The Common Paper Letter of Intent states that it is non-binding and that the final terms will be in a separate definitive agreement. Only its confidentiality terms bind the parties. Rules vary by state, and a court may treat a letter as binding if its wording and the parties' conduct show they meant to be bound.

Why do startups collect customer letters of intent?

A signed letter of intent shows that a real customer wants the product and has agreed a price in principle. Founders use it to plan what to build first and as evidence of demand when they talk to investors. Choose a confidentiality option that allows sharing with investors.

What is the difference between a letter of intent and a term sheet?

Both are mostly non-binding summaries made before a full contract. The Common Paper Letter of Intent has set fields for a product sale. A term sheet is open-ended, with one row per agreed topic, so it fits partnerships and other deals.

Related documents

Customer Letter of Intent (LOI)

A customer's non-binding letter of intent to license your product: the number of users, the monthly fee per user, the delivery date and confidentiality terms.

Common Paper Business Term Sheet

Common Paper's one-page non-binding term sheet for a business deal, such as a partnership or big sale, with a row per agreed topic and binding confidentiality.

Pilot Agreement

Common Paper's standard pilot agreement, version 1.1, for a customer trying your product before buying, with an order form for the product, dates and fees.

Common Paper Mutual NDA

Common Paper's standard mutual NDA, version 1.0: a one-page cover page for the purpose, term and governing law, plus standard terms both sides keep as written.