Letters of intent explained

last updated: 14th June 2011

Letters of intent explained.doc


Letters of intent explained

It is well known that letters of intent are widely used in the construction industry at the inception of a project to enable work to start without having to enter into a 'fully-fledged' contract.

What is less well known is that the wording of the letter will dictate what kind of contractual (or non contractual) arrangement is being entered into.

What are the possible effects of the acceptance of a letter of intent?

A binding contract comes into existence for the carrying out of:

• All the proposed works or
• The works instructed by the letter alone.
• Alternatively no contract comes into existence.


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