# Equipment Purchase Letter of Intent Template

> Source: https://netray.co/tools/equipment-purchase-letter-of-intent-template
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

A letter of intent for buying new or used machinery that records price, conditions, inspection rights and exclusivity before the formal purchase agreement.

## Category

compliance-legal

## Audience

- Business owner
- Operations manager
- Plant manager
- Buyer

## Tool

**Kind:** template

**Output:** document

**Fields:**

#### Buyer

**Key:** buyer

**Type:** text

**Default:** Acme Precision Ltd

#### Seller

**Key:** seller

**Type:** text

**Default:** Midwest Machine Tool Sales LLC

#### Date

**Key:** date

**Type:** date

**Default:** 2026-11-01

#### Equipment description

**Key:** equipment

**Type:** textarea

**Default:** One 2019 vertical machining center, 40 x 20 inch travel, 10,000 rpm spindle, 30 tool changer, serial number to be confirmed on inspection.

#### Proposed purchase price

**Key:** price

**Type:** text

**Default:** USD 92,500

#### Refundable deposit

**Key:** deposit

**Type:** text

**Default:** USD 5,000

#### Delivery and loading

**Key:** incoterm

**Type:** select

**Options:**

- Ex works, buyer arranges rigging and freight
- Seller loads onto carrier, buyer pays freight
- Delivered and installed by seller

**Default:** Ex works, buyer arranges rigging and freight

#### Inspection and due diligence period (days)

**Key:** inspect_days

**Type:** number

**Default:** 14

#### Exclusivity period (days)

**Key:** excl_days

**Type:** number

**Default:** 21

#### Target date for definitive agreement

**Key:** close

**Type:** date

**Default:** 2026-11-30

#### Governing law

**Key:** law

**Type:** text

**Default:** the State of Texas, USA

**Blocks:**

#### Letter of Intent to Purchase Equipment

**Body:** Date: {{date}}

To: {{seller}}
From: {{buyer}}

This letter records the main terms on which {{buyer}} intends to buy, and {{seller}} intends to sell, the equipment below. Except for sections 6 to 8, it is not a binding commitment to complete the sale.

#### 1. Equipment

**Body:** {{equipment}}

The sale includes the manuals, tooling, accessories and software licences listed in the definitive agreement, if transferable.

#### 2. Price and Deposit

**Body:** Proposed price: {{price}}. A refundable deposit of {{deposit}} is paid into escrow or the Seller's account, to be returned in full if the Buyer ends the process in line with section 4, or if the Seller cannot deliver clear title. Taxes, duties and fees are addressed in the definitive agreement.

#### 3. Delivery

**Body:** {{incoterm}}. Dismantling, rigging, packing and removal responsibilities, risk transfer and insurance to be set out in the definitive agreement.

#### 4. Conditions

**Body:** Completion depends on: (a) satisfactory inspection and a documented run-off or test within {{inspect_days}} days; (b) review of maintenance records, accuracy checks (such as ballbar or laser results where available) and ownership documents; (c) confirmation that the equipment is free of liens, leases and encumbrances; (d) Buyer financing, if applicable; and (e) agreement of a definitive purchase agreement by {{close}}.

#### 5. Condition and Warranty

**Body:** The Seller states the equipment is in the condition described, in working order, with no undisclosed major repairs or crashes. Whether the equipment is sold as is or with a limited warranty, and for how long, will be set in the definitive agreement.

#### 6. Exclusivity (binding)

**Body:** For {{excl_days}} days from the date of this letter the Seller will not offer the equipment to others or negotiate its sale with others.

#### 7. Confidentiality (binding)

**Body:** Each party keeps the terms of this letter and any non-public information exchanged confidential, except as required by law or to advisers and financiers who need to know.

#### 8. Governing Law and Costs (binding)

**Body:** This letter is governed by the laws of {{law}}. Each party bears its own costs. Sections 6 to 8 are binding; the remainder expresses intent only and creates no obligation to complete the transaction.

#### Acknowledged

**Signatures:**

- For the Buyer
- For the Seller

**Notes:** Starting point only, not legal advice. Whether a letter of intent is binding depends on its wording and on local law, so label binding and non-binding parts clearly and have counsel review for larger purchases. Export-controlled machines may need extra compliance steps.

## Content

**Intro:** Before a formal purchase contract, buyers of machine tools and production lines usually want a short written record of price, conditions and a hold on the machine. A letter of intent does that, and this template drafts one in a few minutes.

**Sections:**

#### How to use the template

**Body:** Describe the machine as specifically as you can, with make, model, year, key specifications and serial number if known. Enter the price, deposit and inspection period, then set exclusivity long enough to complete inspection and financing. Export to Word or PDF and send to the seller. If the seller replies with changes, track them against the sections here so you can see what moved.

**Bullets:**

- Use serial numbers and photos in an attachment
- Make the deposit refundable with clear triggers
- Allow enough inspection time for a run-off
- Keep exclusivity short but sufficient

#### What to inspect and verify

**Body:** For used machinery, a run-off under power is the single most useful condition. Check spindle hours and runout, axis backlash, ballscrew wear, coolant and hydraulic condition, control version and options, and error history. Ask for maintenance logs and any accuracy measurements. Confirm the seller can actually sell: look for liens, leases and a chain of title, particularly with auction or broker sales. For electrical compatibility, check voltage, phase and frequency against your plant.

#### Binding and non-binding parts

**Body:** A common structure makes the commercial intent non-binding but certain clauses binding: exclusivity, confidentiality and governing law. Be explicit about which is which, because courts may treat a vaguely worded letter as a contract. If you want the right to walk away after inspection, say so and make deposit refund automatic in that case. For larger purchases or cross-border deals, take advice before signing.

#### Common mistakes

**Body:** Buyers often pay a deposit with no refund conditions, skip title checks, forget freight and rigging costs which can reach several percent of price, and agree exclusivity with no inspection date. Others do not ask for software, post-processors, manuals and probes to be included. Costs for installation, leveling, foundation, power and commissioning are separate and should be budgeted before committing.

**Cta:** If you are planning machine purchases and want utilization, maintenance and cost history pulled from your ERP to support the decision, we can talk through the data.

**Faq:**

#### Is a letter of intent legally binding?

**Answer:** It depends on the wording and local law. Many are mostly non-binding statements of intent, with certain clauses such as exclusivity and confidentiality binding. State clearly which parts bind and get legal advice for significant purchases.

#### How much deposit is reasonable?

**Answer:** Deposits commonly range from a few percent to ten percent of price for used equipment, held in escrow or refundable if inspection fails. Larger deposits increase your exposure, so insist on a clear refund condition tied to inspection and title.

#### What should I check on a used CNC machine?

**Answer:** Run it under power, check spindle condition and runout, axis backlash and geometry, ballscrew wear, tool changer reliability, control options and software versions, plus maintenance records and crash history. Verify serial plates and clear ownership.

#### How long should exclusivity last?

**Answer:** Long enough to inspect, arrange finance and agree the definitive contract, commonly two to four weeks. Longer periods may require compensation to the seller, for example by increasing the deposit.

## Search terms

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