Like any contract, your letter of intent should accurately, briefly and concisely describe what the parties have agreed.
Essentially, using a letter of intent means the parties have not agreed all the commercial aspects for the project, or all the legal terms for the full contract. The parties have agreed that, pending the signing of the full contract, the contractor can start the project by providing limited works, goods and services (‘the initial works’).
Your letter of intent does not (and should not) record the agreement to carry out the whole project.
It should accurately record that it is a temporary contract for limited works, that does not extend beyond a few crucial early weeks.
Your letter of intent still needs to guide the parties on what they need to do, so it must work as a mini-contract.
What you should do
You need to ensure your letter of intent:
- sets out and defines a clear scope of limited works (Chapter 11 gives you sample text and explains more)
- limits changes to those works (Chapter 17 provides a simple change process)
- continues until the initial works are complete (Chapter 20 tells you about the pitfalls with expiry dates)
- contains a get-out or termination clause (Chapter 18 explains why)
This post is taken from Chapter 6 of How to Write a Simple and Effective Letter of Intent in Just 500 Words which is available from Amazon in paperback or kindle editions.