header-logo header-logo

02 April 2009 / Jenny Pattison
Issue: 7363 / Categories: Features , Procedure & practice , Terms&conditions , Property
printer mail-detail

Proceed with caution!

Jenny Pattison on letters of intent in the construction industry

Where a project needs to proceed without delay, letters of intent can form a useful temporary solution permitting a contractor to start the preparatory and/or main works, pre-order materials and instruct sub-contractors/suppliers before the formal building contract has been concluded. The recent case of Diamond Build Limited v Clapham Park Homes [2008] EWHC 1439, [2008] All ER (D) 353 (Jun) provides a timely reminder to proceed with caution in agreeing the terms of such a letter, to monitor the progress of the instructed works, and most crucially, to agree and execute the formal building contract at the earliest opportunity.

Types of letter of intent

A letter of intent requires a contractor to commence work pending formalisation of the building contract. The court in British Steel Corporation v Cleveland Bridge and Engineering Company [1981], [1984] 1 All ER 504 outlined three possible categories:

  •   
    ●     a “letter of comfort” expressing an intention to enter into a formal building contract in the future;
  •   
If you are not a subscriber, subscribe now to read this content
If you are already a subscriber sign in
...or Register for two weeks' free access to subscriber content

MOVERS & SHAKERS

NLJ Career Profile: Nikki Bowker, Devonshires

NLJ Career Profile: Nikki Bowker, Devonshires

Nikki Bowker, head of litigation and dispute resolution at Devonshires, on career resilience, diversity in law and channelling Elle Woods when the pressure is on

Ellisons—Sarah Osborne

Ellisons—Sarah Osborne

Leasehold enfranchisement specialist joins residential property team

DWF—Chris Air

DWF—Chris Air

Firm strengthens commercial team in Manchester with partner appointment

NEWS
The High Court’s refusal to recognise a prolific sperm donor as a child’s legal parent has highlighted the risks of informal conception arrangements, according to Liam Hurren, associate at Kingsley Napley, in NLJ this week
The Court of Appeal’s decision in Mazur may have settled questions around litigation supervision, but the profession should not simply ‘move on’, argues Jennifer Coupland, CEO of CILEX, in this week's NLJ
A simple phrase like ‘subject to references’ may not protect employers as much as they think. Writing in NLJ this week, Ian Smith, barrister and emeritus professor of employment law at UEA, analyses recent employment cases showing how conditional job offers can still create binding contracts

An engagement ring may symbolise romance, but the courts remain decidedly practical about who keeps it after a split, writes Mark Pawlowski, barrister and professor emeritus of property law at the University of Greenwich, in this week's NLJ

Medical reporting organisation fees have become ‘the final battleground’ in modern costs litigation, says Kris Kilsby, costs lawyer at Peak Costs and council member of the Association of Costs Lawyers, in this week's NLJ
back-to-top-scroll