To make letters of intent really work for you, you need a fast but fool-proof process. There are two critical stages: what you do before you send a letter of intent and what you do after.
Before You Send It
You should check whether the letter of intent you need to send is ‘good to go’ or a ‘disaster waiting to happen’ using the (free) STAR Checklist. Once you’ve used that Checklist, you may need to
- build a new letter of intent from scratch (or use the template)
- reconsider a few areas to build a better letter of intent. You can learn more in video 1 in my video training series
- do nothing (assuming your letter is good to go).
Once you’ve got great content, you need to ask some searching questions to see if it really is sensible to use your letter of intent. Stage 1 requires you to receive the letter, review it, revise it and research using it.
After You Send It
You could cross your fingers and hope the project contract gets signed.
A more sensible option is to learn what NOT to do to avoid your letter of intent rumbling on … and on. You can learn more in video 2 in my video training series. You also need to understand the risks involved with letters of intent so you can side-step them both now and in the future (see video 3).
Stage 2 involves you sending your STAR letter, supporting the signing of the full contract and side-stepping the pitfalls.
My final video in the series (a webinar) provides a step-by-step process to help you gain trust and avoid disputes. Almost all disputes on letters of intent come from bad drafting or poor use – this video tackles those things head on.
Step 1: Review Your Letter
You should not recycle a letter of intent from a previous project, or copy and paste a specific term, without knowing whether that letter or term is any good, indifferent or dangerous. You need to identify and diagnose the dangerous letters before you use them.
Step 2: Creating a Contract
Contractors want and need a legally binding contract before they start any works to ensure they get paid. That’s where letters of intent come in – a temporary, quick fix solution until the ink is dry on the project contract. Only about a third of letters of intent (in 25 leading cases) were decided by the courts to be contracts under English law. You need to know what the five essentials for a contract are.
Stage 3: Revise or Redraft
You may need some help revising, redrafting or rebuilding your usual letter of intent based on 4 critical contents. You really can keep it simple and build a letter of intent yourself.
Stage 4: Ask Better Questions
Can you just get going? You should first check whether you should be using a letter of intent at all … isn’t it better to agree first and start work later? You need to use them sparingly and ask some searching questions before sending it.
Stage 5: What Not to Do
If you only remember one thing, it should be that there are no guarantees that the project contract will be signed. You can’t sit back once your letter of intent is sent. You need to take action.