The Construction Letter of Intent (LOI) is a critical document used in the United States construction industry when parties need to initiate project activities before finalizing a comprehensive construction contract. It serves as a bridge between initial negotiations and the execution of the final agreement, particularly useful in time-sensitive projects or when early works are required. The document typically includes preliminary scope definition, payment terms, duration, and clearly defined binding/non-binding elements, all while complying with relevant federal and state construction regulations. While not intended as a substitute for a full construction contract, the LOI provides necessary legal protection and clarity for both parties during the pre-contract phase, enabling critical path activities to proceed while detailed terms are being negotiated.
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1. Date and Parties: Identification of the owner/employer and contractor, including full legal names and addresses
2. Project Description: Brief but clear description of the construction project, including location and general scope
3. Purpose of LOI: Clear statement that this is a Letter of Intent and its purpose in advancing the project while final contract terms are being negotiated
4. Scope of Interim Work: Specific description of what work is authorized under the LOI, including any preliminary activities or early works
5. Payment Terms: Clear statement of payment terms for work performed under the LOI, including any caps or limits
6. Duration and Expiry: Specific timeframe for which the LOI is valid and conditions for expiration
7. Binding/Non-binding Elements: Clear identification of which provisions are binding and which are not
1. Confidentiality: Required when sensitive information will be shared during the LOI period
2. Insurance Requirements: Include when preliminary work involves significant risks or site access
3. Site Access Provisions: Necessary when contractor needs immediate site access for preliminary work
4. Termination Rights: Include when LOI covers extended period or significant preliminary work
5. Intellectual Property Rights: Required when design work or proprietary information is involved in preliminary activities
6. Dispute Resolution: Include for LOIs covering significant scope or value of work
1. Preliminary Scope of Work: Detailed description of authorized preliminary activities
2. Preliminary Program: Timeline for activities covered under the LOI
3. Preliminary Price Breakdown: Budget or rates for authorized work under the LOI
4. Key Personnel: List of key personnel authorized to manage and perform LOI activities
5. Site Access Plan: Drawing or description of permitted site access areas if relevant
Authors
Relevant legal definitions
Clauses
Relevant Industries
Construction
Real Estate Development
Infrastructure
Commercial Property
Healthcare
Education
Government/Public Sector
Industrial
Residential Development
Hospitality
Retail
Transportation
Relevant Teams
Legal
Construction
Project Management
Commercial
Operations
Procurement
Risk Management
Business Development
Facilities Management
Contract Administration
Relevant Roles
Construction Project Manager
Contract Manager
Legal Counsel
Project Director
Development Manager
Construction Manager
Chief Operating Officer
Facilities Manager
Procurement Manager
Risk Manager
Commercial Director
General Counsel
Project Control Manager
Business Development Director
Operations Manager
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