[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-280352-105":3,"detail-sidebar-cat-1-en-105":81,"doc-detail-280352-en":127},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":74,"head_meta":76,"extra_data":78,"updated_unix":80},105,"en","the-effect-of-letters-of-intent-part-1-introduction","The Effect of Letters of Intent - Part 1 - Introduction","","Discusses the legal effect of letters of intent in modern construction contracting, focusing on how and when liability arises. The paper explains that many projects start under letters of intent without a concluded written contract, yet legal commentary is limited compared with frequent real-world use. It outlines what a letter of intent typically involves, its common forms, and the key question of whether a contract exists. Using case-law analysis, it clarifies that risk often lies with the party issuing the letter rather than the supplier.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/template/","Template",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/template/letters/","Letters",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/template/the-effect-of-letters-of-intent-part-1-introduction/280352/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/the-effect-of-letters-of-intent-part-1-introduction/280352.png","ImageObject",442,249,{"name":42,"@type":43},"8796093062539","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-22","2026-09-16",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",10,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"Why do letters of intent occur frequently in building contracting, and what is the main problem they create?","Question",{"text":63,"@type":64},"Many main and subcontract agreements begin with a letter of intent, intended to formalize a written contract later. A high proportion are never concluded, leaving uncertainty about contract terms and conditions.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"What is a letter of intent, in practical terms?",{"text":68,"@type":64},"It involves an enquiry by the purchaser, a tender by the supplier (often qualified), post-tender discussions, and then a request to commence work with an undertaking—usually payment—if the supplier starts as requested.",{"name":70,"@type":61,"acceptedAnswer":71},"What are the key legal scenarios for whether a contract exists under a letter of intent?",{"text":72,"@type":64},"Case-law analysis presents three possibilities: an ordinary executory contract, an “if contract” where performance triggers a promised return, or no contract at all—leading to an obligation to pay a reasonable sum for work done.","https://schema.org",{"og:url":32,"og:type":75,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":77,"canonical":32},"index,follow",{"doc_id":79,"site_id":7},280352,1790446870,{"code":4,"msg":82,"data":83},"success",[84,89,94,99,104,109,114,118,123],{"id":85,"doc_module":22,"doc_module_name":25,"category_name":86,"show_sort_weight":87,"slug":88},11,"Presentations",90,"presentations",{"id":90,"doc_module":22,"doc_module_name":25,"category_name":91,"show_sort_weight":92,"slug":93},12,"Resumes",80,"resumes",{"id":95,"doc_module":22,"doc_module_name":25,"category_name":96,"show_sort_weight":97,"slug":98},14,"Invoices",70,"invoices",{"id":100,"doc_module":22,"doc_module_name":25,"category_name":101,"show_sort_weight":102,"slug":103},15,"Posters",60,"posters",{"id":105,"doc_module":22,"doc_module_name":25,"category_name":106,"show_sort_weight":107,"slug":108},16,"Social 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modern building contracting that a significant number of both mainand sub contracts are let under a letter of intent;the intention being to conclude awritten contract shortly afterwards.Of those contracts that start with a letter ofintent a high percentage will never be concluded and the work will be completedwithout an agreement being reached as to the contract terms and conditions.  \nDespite the frequency with which this situation occurs there is a surprisingly littlecommentary in the law books.Keating only devotes a page to ‘letters of intent'and Hudson a page and a half.Both make the point that the extent of liability willdepend on the facts/circumstances of the case.This is of little help to contractorsor subcontractors who finding themselves with a contractual problem need adviceas to their obligations and rights.Despite this lack of comment there is however areasonable body of case law,which can be analysed to reach some fairly clearlydefined principles  \nIt has generally been held that a contractor or subcontractor,who undertakes workunder a letter of intent does so at risk.This paper will seek to demonstrate that thisview is not supported by law and that in fact it is the party issuing the letter ofintent that is more often at risk.  \n# 2 WHAT IS A LETTER OF INTENT?\n\nLetters of intent are distinguished from other ineffective or non-concludedcontractual proposals in that there will normally have been an enquiry sent out bythe purchaser and a tender submitted by the supplier.The tender is likely to havebeen qualified so as not to be open to acceptance.Post tender discussions will  \nprobably have followed.At some point when the purchaser wishes work to start,he willwrite to the supplier requesting he commence the work in whole or in partand undertaking some obligation,usually to pay money if the supplier does asrequested.  \n# 3FORMS OF LETTERS OF INTENT\n\nLetters of intent come in various forms,in response to differing needs of thepurchaser.  \n3.1 It is quite common especially with subcontracts,for the main contractor when hehas concluded his negotiations to issue a works order for the subcontracted work.Typically such an order will say:-  \n\"It is our intention to accept your tender for the XXX work on this contractplease take this order as an instruction to commence work pending thefinalisation of the contract documents for signature.\"  \nThe subcontractor may be required to sign and return the order form,which mayexpressed as a prerequisite to the subcontractor being paid for any work carried out.  \nIn these situations the terms and conditions will have been agreed between theparties,but the main contractor will need time to finalise the documentation,whichcompany procedures may require to be checked by the purchasing manager and/orsigned by a director,prior to issue to the subcontractor.  \n3.2 Another form of letter of intent is to allow a contractor or subcontractor to startpreliminary work such as design,procurement and/or mobilisation.In thesecircumstances a limit on spending may be set,so as to limit the liability of theprocuring party.The letter may also define the method of costing the work,‘asactual or proven costs'.Such a letter may be phrased as follows:-  \n‘Please take this letter as our intention to enter into contract with you for theXXX work.You are required to commence design work immediately,up toa value of fLLL.In the event of no contract being finalised between us weundertake to pay all reasonable and proven costs incurred.'  \nThese conditions can vary considerably.For instance they may state implicity thatterms and conditions are to be agreed or that there is no intention to create legal orcontractual relations.  \n# ","cbCairpgPaInV1nJ","https://ap.wps.com/l/cbCairpgPaInV1nJ","pdf",8100626,"English","# Introduction\n# What is a letter of intent?\n# Forms of letters of intent\n## Works order approach\n## Preliminary work with capped spending\n# When is there a contract under a letter of intent?\n## Three possible situations","[{\"question\":\"Why do letters of intent occur frequently in building contracting, and what is the main problem they create?\",\"answer\":\"Many main and subcontract agreements begin with a letter of intent, intended to formalize a written contract later. A high proportion are never concluded, leaving uncertainty about contract terms and conditions.\"},{\"question\":\"What is a letter of intent, in practical terms?\",\"answer\":\"It involves an enquiry by the purchaser, a tender by the supplier (often qualified), post-tender discussions, and then a request to commence work with an undertaking—usually payment—if the supplier starts as requested.\"},{\"question\":\"What are the key legal scenarios for whether a contract exists under a letter of intent?\",\"answer\":\"Case-law analysis presents three possibilities: an ordinary executory contract, an “if contract” where performance triggers a promised return, or no contract at all—leading to an obligation to pay a reasonable sum for work done.\"}]","The Effect of Letters of Intent - Part 1 - Introduction | PDF",1789537850,6]