An LoI lays out the understandings of the parties, so they can know whether to proceed and under what terms they should do so. An LoI also creates a backstop o

An LoI lays out the understandings of the parties, so they can know whether to proceed and under what terms they should do so. An LoI also creates a backstop of intents in case of legal proceedings. Thirdly, an LoI let's parties define expected remedies in case the deal fails. There may additionally be specific implementation details spelled-out. I'm sure there may be more reasons, but those are the ones I'm familiar.