Use an LOI to establish a controlled path to a definitive purchase agreement.
Describe the actual transaction
Identify the aircraft and relevant serial numbers, proposed price, included equipment, records, deposit, inspection approach and intended schedule. State who will prepare the purchase agreement and what happens if the parties never execute it. Do not describe every LOI as nonbinding: counsel should assess the specific document, governing law and any provisions intended to operate immediately.
Resolve expensive assumptions early
Discuss who selects the inspection facility, who pays to move the aircraft, which findings permit rejection or renegotiation, and when deposit rights change. Clarify whether financing, insurance, title or other conditions are expected in the definitive agreement. A seller's acceptance of a commercial price is not agreement to every later condition the buyer wishes to add.
Consider an illustrative mismatch
Suppose a buyer assumes a deposit remains refundable until loan funding while the seller assumes it hardens after technical acceptance. The parties may agree on a $5 million price and still disagree on a major risk allocation. Put the proposed trigger into the negotiation record and have counsel resolve it before money moves. Neither escrow placement nor a verbal assurance automatically supplies the missing term.
Control the handoff to the purchase agreement
Track the LOI's deadlines, exclusivity, confidentiality, expense commitments and termination provisions where applicable. Compare the later agreement against the settled commercial points and document deliberate changes. An LOI should help the team discover a disagreement while it is still manageable, rather than create the impression that a finance-ready transaction already exists.
Working document to prepare
Create a negotiation sheet that lists each proposed LOI term, the buyer's assumption, the seller's response and the definitive agreement section expected to resolve it. Mark unresolved items rather than smoothing them into a narrative. Include price, asset identity, deposit triggers, inspection access, movement cost, dates and immediate obligations. Have counsel identify which entries must be settled before signature and which can be negotiated later without creating unintended commitments.
Your next-step checklist
- Identify aircraft and included assets.
- Have counsel classify binding provisions.
- Define deposit and inspection assumptions.
- Reconcile LOI and definitive agreement.
Sources & further reading
Primary sources support the relevant facts. Our planning questions and illustrative exercises are editorial analysis; they do not replace transaction-specific advice.
- AOPA written agreement guidance · accessed 2026-10-28