Letter of intent

A letter of intent, or LOI, is the document that puts a proposed price and the major deal terms in writing before either party invests in the far more expensive work of full legal contracts and formal due diligence. It is generally non-binding on price and most terms (with a few common exceptions like confidentiality and exclusivity, which typically are binding), and its real function is making sure buyer and seller actually agree on the shape of the deal before either side spends significant money finding out they don't.

A thorough LOI covers more than price: the structure (asset or stock purchase), the transition period and the seller's expected role during it, the non-compete terms, financing contingencies, and the timeline to closing. A vague LOI that only states a purchase price is a common and expensive mistake, because it leaves every other meaningful term to be negotiated later, often after the buyer has already committed real diligence costs and emotional investment to the deal.

Have a dental-experienced attorney review the LOI before signing, even though it is non-binding: the terms it sets tend to become the terms of the final agreement, since renegotiating them later is harder once both sides feel the deal is already largely settled.