Letters of intent for construction projects

I am studying for a MSc in Construction Project Management from Loughborough University and would like some opinions on the use of LOIs in the construction industry. There seems to be a paucity of guidance for practitioners (I am Building Surveyor looking to enhance skills and qualifications) in the formulation and administration of them. Most professional guidance notes (very little in the RICS Contract Admin or PM BOK) direct the practitioner to a legal adviser. Is this right when PMs, QSs and BSs are tasked with administering contracts of significant complexity? i.e. do we not have th requisite skills to compile a robust letter of intent?

Any discussion would be most welcome.




Garry Murray

I believe that experienced construction professional do have the requisite skills to complile a LOI, however not necessarily up to date knowlege of the Law. Construction professionals will of course have detailed knowledge within their own profession but we need to remember that there are many industries that contribute to case law about which we are unlikely to know unless we are practicing Lawers in the area of contract law. I think also that given the intent of some standard contract forms to avoid LOI, independent legal advice should be welcomed.

Mohamed Afzal Khan

Issue of LOI's is common in the construction industry. I do not believe in issue of LOI, the practice should be to issue the contract and get it signed before start of the contract works. By issuing LOI one is only delaying formalising of the contract. The issue of LOI in essence is a contract with the contractor and employer, I have experienced that to agree the terms of the contract after LOI is issued it becomes difficult and the contractor will often delay the process. Stay clear of issuing LOI and practice formalising the contract.