Letters of intent—construction


Published by a ³ÉÈËÓ°Òô Construction expert
Practice notes

Letters of intent—construction


Published by a ³ÉÈËÓ°Òô Construction expert

Practice notes
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What is a Letter of intent?

Letters of intent are used in construction and engineering projects to allow the employer to mobilise a Contractor before the employer is in a position to enter into the full building contact. The letter may only instruct the contractor to progress design and Procurement in relation to the project, or it may authorise works to be commenced on site.

Letters of intent vary in their form and complexity. A very simple letter of intent might only confirm a party's present intention to enter into a contract for construction works in the future. In the absence of anything else, such a letter forms nothing more than a non-binding statement of present intention, akin to a comfort letter. However, most forms of letter of intent used for modern construction contracts are much more complex and seek to create contractual relationships between the parties. See Turriff Construction v Regalia Knitting Mills (1971) 9 BLR 20 (not available in Lexis®Library).

Modern letters of intent usually set out the employer’s intention to enter into a contract with the contractor

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Jurisdiction(s):
United Kingdom
Key definition:
Letter of intent definition
What does Letter of intent mean?

Letters of intent are preliminary agreements that precede substantive contract negotiations. They are also referred to as: heads of agreement or heads of terms, memorandum of understanding; pre-contract protocol or term sheet. They provide an outline of the commercial deal agreed between the proposed parties to a contract rather than detailing the finer points.

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