Letters of intent can be recommended in specific circumstances:
“in view of the perceived importance of achieving early completion and, specifically, early commencement of the works, it was acceptable to advise commencing [the project] under a letter of intent rather than waiting until a formal building contract could be executed.” [Ampleforth]
When I am speaking about letters of intent, many of the questions come from advisers (legal or professional) who want to know what to tell their clients. Here are my top tips.
Tip 2: You need to:
- understand the risks involved with using a letter of intent (see my videos)
- advise your client when the passage of time means a letter of intent is no longer appropriate 
- advise your client that ‘the longer the works continue under a letter of intent the less incentive the contractor has to sign the contract’ 
- understand that the full contract is not implied into the letter of intent 
- notify your client if you are no longer competent to advise and recommend your client takes professional legal advice 
A project is NOT “effectively doomed from the moment that the parties agreed…to proceed by way of a letter of intent” and that in specific circumstances a letter of intent is “a reasonable course to adopt.”
Tip 3: You should know when a ‘careful’ letter of intent is appropriate or reasonable. According to Cunningham v Collett, this is when ‘there are good reasons to start work’ before the full contract is signed and these items have been agreed:
- The scope of works
- The price for those works
- The full contract’s terms
- The start and finish dates
- The contract programme.
If you really want to understand whether a specific letter of intent is good to go, download my Checklist.
Update: A law firm was not held liable for the building delays when it failed to advise it to enter into a full contract as the losses were not caused by the negligent advice. See Harlequin Property (SVG) Ltd v Wilkins Kennedy (a firm)  EWHC 3188
Cases: Ampleforth Abbey Trust v Turner & Townsend Project Management Ltd  EWHC 2137 (TCC) [paragraphs from BAILII report]; Cunningham & Ors v Collett & Farmer  EWHC 1771 (TCC)