Letters of intent

Contract negotiations can be lengthy and detailed at the start of a project. On those occasions where a contract cannot be signed before the start of the project, a letter of intent can be a useful tool under which works can commence while contract negotiations are concluded.

Letters of intent, comfort letters, consent to spend, and recognitions of contract, should be used as a last resort where time taken to draw up and finalise a formal contract would otherwise delay the works. They may be used to enable a supplier or contractor to pre-order materials or to create a site establishment. If agreement is not reached on the main contract, the client will reimburse the supplier for their expenses.

A lawyer should draft letters of intent. It is extremely important that they are worded carefully and accurately and understood by all parties to avoid lengthy legal battles should a contract not be agreed.

This section is maintained by Richard Mills of Mills & Co Solicitors.

Document template: Comfort letter

Document template: Consent to spend

RICS journal article: Fresh case stresses care needed with letters of intent