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The Letter of Interest (LOI) is a crucial preliminary document in Canadian business transactions, used when parties wish to formally express their serious intention to pursue a business opportunity while maintaining flexibility for negotiations. This document type is particularly valuable in complex transactions where parties need to establish basic terms before committing resources to detailed due diligence and formal agreements. An LOI typically outlines the fundamental terms of the proposed transaction, timeline, and any binding provisions (such as confidentiality and exclusivity), while clearly stating its generally non-binding nature. Under Canadian law, while LOIs are primarily non-binding, certain provisions can be enforced if properly drafted, making it essential to carefully consider both federal and provincial legal requirements during preparation. The document serves as a bridge between initial discussions and formal agreements, providing a structured framework for negotiations while protecting both parties' interests.

1. Date and Address Block: Current date and recipient's full business address

2. Sender Information: Complete details of the sending party, including business name and address

3. Subject Line: Clear indication of the proposed transaction or opportunity

4. Introduction: Brief introduction identifying the parties and expressing interest in the potential transaction

5. Transaction Overview: High-level description of the proposed transaction or business opportunity

6. Key Terms: Basic outline of principal terms and conditions being considered

7. Timeline: Proposed schedule for due diligence and negotiation process

8. Confidentiality Statement: Brief statement regarding the confidential nature of discussions

9. Non-Binding Nature: Clear statement that the LOI is non-binding except for specified provisions

10. Closing and Signature: Professional closing, signature blocks for all parties