When things go wrong with letters of intent, the consequences depend on which side of the project you are on.
It all depends on your perspective:
- Wrong for a client means start late or no contract, neither of which are great results
- Wrong for a contractor means the full contract is never signed. Either the contractor has no obligation to continue the project, or it does and there is no method of calculating a price for the works completed.
- Wrong for the contract administrator means allowing works to continue under a letter of intent, which is negligent.
- Wrong for a funder means lending money when there is no real contract, no warranties or TPR and the risks to its borrower are too high.
- Wrong for an adviser might mean a claim for costs not recoverable against a defaulting party due to a lack of proper contract.
What should you do?
If you want to minimise letter of intent disputes, then you need to create a clear contract strategy, create a better letter of intent and use it wisely. Grab my free video series if you need more help.