A Letter of intent (LOI) is a letter between two businesses, which provides the basis for a future or proposed agreement. This can also be drafted as an agreement between two businesses (Heads of terms), rather than a letter. However, the effect of these two documents is the same.
It can be used in any context to record negotiations and discussions, where the outline or detail of the terms of a future agreement have been agreed upon. It is not necessary for the negotiations to have been completed, they may be ongoing.
However, you should remember that this letter is not a substitute for a contract. It is important that you sign a legally enforceable agreement before you start doing things under it.