Statement of intent: Overview, definition, and example
What is a statement of intent?
A statement of intent is a document or declaration that outlines the goals, plans, and intentions of an individual or business regarding a specific action, project, or agreement. It is typically a non-binding statement that expresses a party's intention to take certain actions in the future, but it is not legally enforceable. It serves as a way to communicate the general direction or purpose behind a proposed agreement or initiative, giving other parties an understanding of what is expected or planned.
For example, a business may issue a statement of intent to express its desire to enter into negotiations for a partnership, even though the final terms have not yet been agreed upon.
Why is a statement of intent important?
A statement of intent is important because it provides clarity about the objectives or plans of a business or individual. It sets expectations and establishes a starting point for further discussions or negotiations. While it may not be legally binding, it helps to create a mutual understanding and can pave the way for formal agreements in the future. For businesses, a statement of intent can also demonstrate commitment or good faith to potential partners, investors, or stakeholders.
For SMBs, using statements of intent can be a useful tool for outlining goals, starting negotiations, or securing early support for projects or partnerships.
Understanding statement of intent through an example
Imagine your small business is planning to partner with another company for a joint venture. Before drafting the formal contract, you send a statement of intent to express your company's interest in the partnership, outlining the general goals and vision for the collaboration. This document helps clarify the intentions of both parties and serves as a basis for future negotiations.
In another example, your business might want to express its intent to purchase a piece of property. You submit a statement of intent to the seller, outlining your interest in buying the property and your plans to complete the transaction. This signals your seriousness about the purchase while leaving room for further discussion and negotiation.
An example of statement of intent in action
Here’s how a statement of intent might be referenced in a business agreement or communication:
“This Statement of Intent outlines the parties' mutual interest in exploring a potential collaboration. It expresses the intention to negotiate the terms of a partnership agreement, with the goal of finalizing a formal agreement within the next 60 days.”
Conclusion
A statement of intent is a declaration that outlines the goals, plans, or intentions of a business or individual regarding a particular action or agreement. While not legally binding, it helps establish clear expectations and serves as a foundation for further discussions or negotiations. For SMBs, using statements of intent can be a valuable tool for initiating projects, partnerships, or agreements in a clear and transparent way.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.