Category: Strategy

Which is Better: Letter of Intent or No Contract?

Sarah Schutte of Schutte Consulting joined me at a blab debate and discussed whether a letter of intent was better than ‘no contract’. We covered: the requirements for a contract, the critical contents for a workable legally binding letter of intent why bother with a contract, how a letter of

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Review the Risk in Using a Letter of Intent

Although there are a number of pitfalls with letters of intent, the key risk is that the full contract is never signed. A letter of intent is used to get the project started quickly, but it is only intended to be a temporary stop-gap. So why don’t the parties get

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When Letters of Intent Go Wrong: the Client Perspective

A letter of intent is a contract to start a construction project in the form of a letter. It may also confirm the sender’s intention to award the contract for the whole project to the recipient – the contractor. The purpose of a letter of intent is two-fold: (1) to

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Your Contract Strategy Should Be Deliberate

Contract strategy is just a fancy way of saying choosing the type of contract you want. There are various issues to take into account: your procurement strategy: traditional, design and build, prime cost, management contracting your payment strategy: lump sum, remeasurement, target price your risk strategy: pro-active or reactive; transfer,

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Using Letters of Intent

According to most professional bodies, you should ‘just say no’ when offered a letter of intent. However, the court recently said that it was not negligent to start a project under a letter of intent. So what advice is there on using letters of intent? One case (Cunningham v Collett)

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Use LADs to Compensate (not Deter)

In order to avoid technical defences to an agreed level of damages (liquidated damages), you should concentrate on making sure the purpose of the clause is made really clear. Compensation In Lorsdvale v Zambia, the question whether the amount was a penalty or a genuine pre-estimate was based on: “whether

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Failure is Your New Best Friend

Contracts should help you do business. But we have to be realistic. Change happens. Risk events occur. Humans are fallible. Most contracts do not anticipate ‘failure’ in stark terms. However, not every project will be a success, especially those which are on the edges of what is currently possible. Is

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Contracts for Success: Seek Win-Win

One of the issues I have grappled with is whether a contract can result in project success. Can your terms encourage the project team to meet its objectives (the carrot approach) or do they merely provide remedies in the event that those objectives are not met (the stick approach)? If

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Negotiate Your Contract

In deciding whether a clause is unfair, a tribunal will consider whether your contract partner had a choice to accept or avoid a particular term. Many years ago, a highly influential judge, Lord Denning, said: None of you nowadays will remember the trouble we had – when I was called

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Using A Net Contribution Clause

Any member of a project team can rely on the Civil Liability (Contribution) Act 1978 to share the losses with anyone else on the project team who is responsible for the same damage [read more]. However, it has become common in the UK construction industry to use a specific clause

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