Letters of intent: Getting them right

Letters of intent are a fiercely debated topic in the legal sector. Despite their established role in the construction industry, their use is feared to detract from the importance of signing fully negotiated written contracts. This poses risks because of a lack of certainty and so, unsurprisingly, some legal commentators have urged that letters of intent should be completely avoided. Against the competitive and time-sensitive commercial backdrop of the construction industry, letters of intent have become a practical necessity, but how can parties ensure they get them right? In this paper, leading construction lawyers from Hay & Kilner Solicitors demystify the letter of intent document by offering a practical explanation of how it works, where it has caused misunderstandings and which questions are regularly asked about using one in practice — to include compliance queries around timings, finances and legalities. The paper offers a simple checklist of dos and don'ts designed to avoid ambiguity and open-endedness.