A Practice Note providing an overview of a letter of intent (LOI) and memorandum of understanding (MOU), two types of preliminary agreements that parties to a proposed commercial transaction (for example, a buyer and seller or a service provider and customer) can use to clarify key deal points and expedite decision-making. This Note discusses LOIs and MOUs as binding, nonbinding, and partially binding preliminary agreements, the duty to negotiate in good faith, and the importance of drafting clearly to avoid unintended consequences.