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How to Write a Letter of Intent (LOI)

Follow these steps to draft a Letter of Intent (LOI) that survives counterparty review, bank scrutiny and, if needed, ICC arbitration. Grab the free Letter of Intent (LOI) template at the end.

Step-by-step

  1. 1. Buyer identification
    Legal name, address, registration number, authorised signatory and title. Include company stamp if used in your jurisdiction.
  2. 2. Commodity & grade
    Name the commodity and grade (e.g. Russian Export Blend Crude, Colombian Steam Coal 6300 NCV, Anode-grade Petcoke).
  3. 3. Quantity & schedule
    Trial quantity, contract quantity, delivery cadence (monthly lifts) and total contract volume in metric tonnes or barrels.
  4. 4. Discharge port & Incoterms
    State the discharge port and Incoterms 2020 rule (CIF ASWP is typical for LOI). Add safe berth clause.
  5. 5. Target price & payment
    State target price basis (flat or index-linked) and payment instrument: MT700 irrevocable LC at sight, from a top-50 world bank.
  6. 6. Banking coordinates
    Issuing bank name, SWIFT, officer and phone. Attach RWA if you want a fast FCO in return.
  7. 7. Validity & next step
    State LOI validity (5-10 banking days) and the commitment to proceed to FCO within that window.

Common pitfalls to avoid

  • Leaving placeholder text like [ ] or {seller name} in the executed copy.
  • Missing signature date, or signing outside the validity window quoted on the document.
  • Referencing Incoterms without the year - always cite 'Incoterms 2020'.
  • Omitting the arbitration seat and governing law - defaults vary by country.
Free template
Free Letter of Intent (LOI) Template
Download a free Letter of Intent (LOI) template for commodity buyers. Editable Word and PDF format with banking coordinates, quantity, delivery and payment sections.
Get the template

How to Write a Letter of Intent (LOI): Quick Overview

Follow these steps to draft a Letter of Intent (LOI) that survives counterparty review, bank scrutiny and, if needed, ICC arbitration. Grab the free Letter of Intent (LOI) template at the end.

Numerical Example: How to Write a Letter of Intent (LOI) Step-by-Step

Key pitfall to avoid: Leaving placeholder text like [ ] or {seller name} in the executed copy.

1. Buyer identificationLegal name, address, registration number, authorised signatory and title. Includ
2. Commodity & gradeName the commodity and grade (e.g. Russian Export Blend Crude, Colombian Steam C
3. Quantity & scheduleTrial quantity, contract quantity, delivery cadence (monthly lifts) and total co
OutcomeFollow all steps in order for best results
Source: SSLT Global Editorial - How to Write a Letter of Intent (LOI)
Last reviewed: October 2026

FAQ

Is an LOI legally binding?
No. It is a non-binding statement of intent, but any bank coordinates and buyer details in it must still be accurate.
Should the LOI mention commission or IMFPA?
No. Fee protection belongs in a separate NCNDA/IMFPA between the intermediaries, not in the buyer's LOI to the principal seller.

Other how-to guides

How to Write a Sales & Purchase Agreement (SPA)How to Write a Irrevocable Corporate Purchase Order (ICPO)How to Write a Full Corporate Offer (FCO)How to Write a Soft Corporate Offer (SCO)How to Write a Non-Disclosure Agreement (NDA)How to Write a NCNDA (Non-Circumvention, Non-Disclosure)How to Write a IMFPA (Irrevocable Master Fee Protection)How to Write a NCNDA + IMFPA (Combined)