Our main contractor wants us on site next week on a letter of intent. Can you check it before we start?
Yes: the check takes 5 working days, and we flag a start date, expiry or cap that is already close the day we find it.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
We read the letter the way we would read a subcontract. We check the cap, the scope it covers, the price basis, the expiry, the payment route and what happens if the subcontract never arrives. We set each one against your quote and what you will commit in the first weeks. Each gap goes back to your main contractor as a short written proposal in your name. Before work starts, every point is agreed in writing or recorded as open, with its risk priced. The decision to start is always yours. Send the letter as issued, your quote and the tender correspondence, and the drawings and programme you priced from. Add your plan for the first weeks on site. If you need it faster, ask on the first call: we quote an express turnaround in writing where the diary allows. Whether the letter is a binding contract, and what its words mean in law, are questions for your solicitor.
Example
Illustrative example. The scenario and figures are invented.
The facts
A mechanical subcontractor is sent a letter of intent on a Monday for a package due to start the following Monday. The letter caps spending at £60,000 and says nothing about rates or application dates.
What happens
- The subcontractor sends us the letter, its quote, the drawings it priced from and its plan for the first month.
- Its plan for the first month commits £85,000, above the cap. We flag that to the subcontractor the day we find it.
- We send short written proposals to the main contractor in the subcontractor's name. They ask for a cap that covers the first stage, the quote's rates and monthly application dates.
- The main contractor raises the cap and accepts the rates. It does not agree the application dates, so we record them as open, with the risk priced.
The letter against the plan
| Item | Amount |
|---|---|
| Cap as first issued | £60,000 |
| First month's committed spend | £85,000 |
The outcome
The subcontractor decides to start knowing exactly what the letter covers and what it does not, with every gap agreed or recorded in writing.
To have the letter checked and the gaps agreed or recorded before you start, see our Letter of Intent Loss Prevention service.