The best way to determine if a business deal has been reached is to reduce it to writing by way of a letter of intent, which is typically not binding but contains the essential business provisions and contemplates the negotiation of a purchase agreement, should the business deal be agreeable to both parties. The purpose of it is to avoid the expenditure of time and resources on a purchase agreement in situations where there is no underlying business deal yet. It allows parties to settle the main business points of the proposed deal in advance of the legal agreement.