Letters of Intent
Why Letters of Intent?
As it says on our manifesto:
“We want your contracts to help you do business – by creating trusting, collaborative partnerships.”
In the last 20 years I have read more letters of intent than I care to remember! I read them on Friday afternoons when the project team were itching to start work on Monday at 8am. I read them in the 100+ cases I studied for my SCL Hudson Prize-winning paper (later peer-reviewed article in International Journal for Law in the Built Environment). I read them when creating my lecture notes for undergraduates on Salford University’s Construction Programme. And I read a wide variety of current versions being negotiated and used when preparing for my letter of intent workshops.
And what an dangerous bunch of words they turned out to be!
I can only guess at the reasons for this:
- lack of precedent or standard form letters of intent
- haste in which they are prepared
- lack of consensus on their actual purpose
- hope that they will be overtaken by the main contract
- failure to understand the legal principles
Given that the courts never have a kind word to say about letters of intent, why would anyone want to suggest how they can be improved?
Why Do I Think You Should Change?
I believe you should start a project as you mean to go on – that means using a realistic contract strategy, and contracts that you can read, understand and use. Even if they are short, letters of intent should make sense!
It is rare that the client and contractor both get what they want from the letter of intent. It is either too formal, too limited, too ambiguous, too long, too complex… and does not meet their aims. If you don’t know what you want from a letter of intent, how can it possibly help you achieve success?
Starting as you mean to go on also means creating trust between the client and the contractor from the minute they walk on site – letters of intent do not create trust when they are meaningless drivel.
Any contract can reinforce best practice and change bad practice. And with letters of intent this means reinforcing the need to meet the project timetable, reinforcing the need for a full and proper contract asap, and changing the practice of recycling old and rubbish versions.
Lastly, while there is no magic in the precise word-count for your letter of intent, you can and should write, understand and use 500-word contracts. I have seen letters of intent extending to nearly 20 pages – and by this time they are nearly as long as the short form standard form contracts (which would be a better option in terms of risk management).
How the Book Will Help
My first aim for the book was to explain why I am challenging ‘received wisdom’ (aka centuries of practice) by creating short and simple contracts. Frankly, it’s because I have seen the mess created by longer contracts both when users try and read/understand them and when they try and put them into practice – more often than not they simply shove them into a drawer and cross their fingers for luck. Making contracts easier to read, understand and use is also backed up by construction industry data, plain language studies and thousands of examples across industries and jurisdictions.
My second aim was to explain what you really really need in your letter of intent (‘core content’) and how existing letters fail to precisely record just those four items. Of course, a workable contract needs a few more essential (essential extras) which are also explained in simple terms. I started with a blank sheet of paper and added just enough to create a temporary contract for some limited initial works. You’ll also learn what happens if you say nothing on each of those subjects (a zero-word contract!).
My third aim was to make sure you could write it yourself. Each of the ten content chapters includes sample text you can adopt, adapt or reflect on to develop a letter of intent that suits your company, your project and your needs. It also contains case studies of those who have got it wrong to help you learn from their mistakes and not create your own.
Finally, I have developed the 10 Point Scorecard so you can rate your letters of intent, and those you receive, against the advice in the book and the Sense Checklist – both of which are in the book and as pdfs via the links on this page.
As well as the book, you can get information, tips and techniques from these specially created online resources:
- STAR Checklist (free)
- template to download (free)
- 3-part video series (paid) with bonus webinar
- A to Z of letters of intent (links to series of LinkedIn articles)
I have also written a series of blogs on what happens when letters of intent go wrong from the perspective of: