Letter of Intent for an Aircraft Purchase: What Goes In It
In a private jet purchase, the letter of intent (LOI) is the first document both sides sign. It is usually short and mostly non-binding, but it sets the price, the deposit and the inspection terms. Everything negotiated later starts from it. A careless LOI can cost a buyer far more than the inspection that follows.
What an LOI does
Confirms the buyer's offer and the seller's acceptance in principle
Takes the aircraft off the market for a period (exclusivity)
Sets how the deposit is paid and held
Defines the pre-buy inspection
Sets a timeline to a full purchase agreement and closing
Most of it is non-binding, but a few clauses (deposit, exclusivity, confidentiality, governing law) are usually binding. Check which are which.
The clauses that matter
The aircraft
Identify it exactly: manufacturer, model, serial number and registration, plus the engines and auxiliary power unit by serial number. An LOI that says "registration to be confirmed" is a warning sign.
The seller
Name the seller as a company, and confirm whether it is the registered owner. If the seller is buying the aircraft from someone else to sell it on to you, you should know that before you pay anything.
Price and what it includes
State the price and what is included: loose equipment, spares, records, engine programme transfer, any upgrades in progress.
Deposit
The amount, when it is paid, and that it goes to a neutral escrow agent. State exactly when it becomes non-refundable. Our guide to escrow and deposits covers this in detail.
Pre-buy inspection
Where the inspection happens and who carries it out
Scope: records review, a full inspection of the airframe, a borescope inspection of the engines, a test flight
Who pays for the inspection and for returning the aircraft to service
How long the buyer has to accept or reject after the inspection report
Resist restrictions such as no borescope, no panel removal, or a two day acceptance window. They protect the seller, not you.
Delivery condition
Define the condition in which the aircraft must be delivered: airworthy, all discrepancies found at inspection fixed at the seller's cost (or an agreed price reduction), no damage history beyond what is disclosed, all inspections current, and clean title.
Exclusivity
A period during which the seller will not negotiate with other buyers, usually starting when the deposit is received.
Timeline
Dates for signing the purchase agreement, completing the inspection and closing. Build in time for the change of registration.
Walking away
State clearly when the buyer can withdraw and get the deposit back: an unsatisfactory inspection, title problems, failure to deliver in the agreed condition.
Terms sellers slip in
"As is, where is" delivery with the deposit non-refundable from day one
Very short acceptance periods
The seller's own pilot in command on the test flight, with limits on what the buyer's team can see
Exclusivity that only starts after the deposit, while the deposit becomes non-refundable immediately
Deadlines in a distant time zone, to create pressure
Some of these are normal in a competitive market. Together, they shift all the risk to the buyer.
Before you sign
Identify the aircraft by serial number and check its history
Confirm who owns it
Agree the inspection scope in writing
Send the deposit only to a neutral escrow agent
Have an aviation lawyer review the draft
How we help
Jetvice represents buyers in private jet purchases, including preparing and reviewing letters of intent. Email info@jetvice.net with the aircraft you are considering.
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