DISCOVER JUST 4 ITEMS YOU NEED TO BUILD A BETTER LETTER OF INTENT

Before we start, to tell if your letter of intent is ‘good to go’ or a ‘disaster waiting to happen’ download my STAR Checklist.

As you know, a letter of intent is a critical document on any construction project. It starts the works, sets the tone for you and your partner’s working relationship, and explains who is doing what.  Most letters of intent are a collection of “pick and mix” clauses – without little or no thought given to what the contract really needs to do.

But actually you need to focus on just 4 core items to create a better letter of intent:

1. The parties – the person carrying out and the company paying for the works under the letter of intent,
2. The works – but only those required to get the ball rolling, not the whole project (the ‘initial works’)
3. The price – that’s the price for the initial works, not the whole project
4. The timescales – for completing the initial works under the letter of intent, not the whole project.

Many of the existing examples fail to even meet these simple requirements. They talk too much about the project and not the initial works! By covering the details for the initial works clearly, you will have a better letter. And if you need to start from scratch then with so few elements, this really is a contract you can build yourself.

You will get a better contract to start your project when you write a better letter of intent. But simple contracts provide other benefits:

• It has no nasty surprises – this creates trust and helps start your project properly.
• It is short – so the users can read and understand it.
• It is clear and records your agreement in a collaborative manner.

Why don’t you put together a simple structure for a letter of intent using the four core elements: parties, works, price and time. You can download my free Letter of Intent Outline to provide a basic covering the four critical contents you need.

Next time you need to build a better letter of intent, DO NOT RECYCLE.

Before you send your new and improved letter of intent, you’ll need to ask a few searching questions to see whether it is the right time to send one. Letters of intent should be used sparingly which means it’s not always the right thing to send one at all. And before you send it, you need to learn what NOT to do once it’s been sent. Both are covered in video 2.

Remember the most senior judges in England said that “the moral of the story was to agree first and start work later.” In the next video we will be looking at what you can do to help create a better ending to your story.