An LOI, or Letter of Intent, outlines the basic terms and conditions of a proposed business aircraft transaction. It is used in the early stages of the negotiation process before a formal purchase agreement is drafted.
The LOI identifies the major players (buyer, seller, and their representatives), the aircraft make, model, registration, and serial number, and spells out the details of the purchase price and payment terms, including any requirements for deposit payments and escrow arrangements.
The general terms, conditions, and timeframe for the visual inspection, pre-purchase inspection, acceptance of the aircraft post-pre-purchase inspection, and delivery are all expressed in the LOI.
International transaction LOI
Importing an aircraft into the U.S. for purchase is a complicated process. An LOI for an international transaction requires additional essential factors.
Don’t Do It Alone
LOIs are NOT form letters. You can’t use the same language for all transactions, especially when importing an aircraft. There are always unknowns and irregularities that need to be identified and addressed, and if not considered and written in at the LOI stage can be costly to the purchaser after closing, or at times not allow the parties to be able to negotiate an Aircraft Purchase Agreement and consummate the transaction.
It all comes down to knowing how to structure the agreements properly. And that comes with years of experience with importing/exporting aircraft.
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