How to Write Letter

Construction Letter of Intent

When any project of construction is to be started, there are several bidders for its tender. In order to confirm which bidder will be given the contract, a construction letter of intent is send by that company to the bidder. After this, the two parties can sign an agreement later on.

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The construction letter of intent must state whether it is one of legal binding or not. It outlines the main terms of and conditions of the contract or agreement. This letter will focus on issues like cost, labor, duration, details of payments, and termination of the agreement procurement of raw materials and so on.

Let us look at some of the key features contained in this letter:

  • Details of the cost: the cover letter should include costs like cost of raw materials
  • The labor charges
  • Provisions made by both the parties
  • Terms and condition which can terminate this contract
  • Duration allotted for the completion of the construction project
  • How to resolve any conflicts or disputes between the two parties

A good letter of intent would definitely give a contractor some guidelines to work on. However, it is advisable to have a proper agreement formulated before commencing the work or make provisions for the letter of intent to have legal binding.

ASD Associates,
4587 South Avenue,
Mail Stop,
Seattle, WA 97654
USA.

Mr. Stevens Connery,
CEO ZXC Constructions,
1423 South Street,
Seattle, WA 980202,
USA.

Reference: Letter no. DFG4325

Dear Mr. Connery,

We are pleased to inform you that our board of directors has decided to sign the contract of construction with your company. This letter of intent will set the terms and conditions for the final contract that will be formed at a later stage.

Property Address:

325 East Street,
Seattle, WA 97031
USA.
  • Area of the property: Approximately: 7200 square feet
  • Nature of Construction: Construction of 4 storey commercial building.
  • The building shall have all the safety features like: in-built fire alarm, emergency exit and elevator.
  • Raw Materials: The raw materials for the construction shall be provided by the construction company. The quotation of the cost shall be given before the commencement of the project.
  • Labor: The cost of labor and its procurement shall be borne by the construction.
  • Payment: The construction of the building shall be done in 4 phases. After the construction of every phase, its payment shall be made within 30 days of completion. The approximate cost of the construction of every phase shall be decided before the commencement of the construction.
  • The raw materials used by the construction company shall be subjected to strict quality check by ASD Associates.
  • The construction company shall provide maintenance free of cost for the building, for a period of one year.
  • Duration: The completion of the project shall take 2.5 years. The owner shall reduce 15% of the total payment in case the construction gets delayed by more than a month.
  • Advance: A sum of $__ shall be paid by ASD Associates before the construction starts and after both the parties have signed the final contract.
  • The cost of legal procedures shall be shared by both the parties.
  • Termination of the contract: Both the parties can terminate the contract by mutual agreement. The contract can also be terminated in case the contractor is found using inferior materials or if the contractor violates any terms of the contract

This letter of intent does not have legal binding. You are advised to consult your lawyer before signing this letter. If you have any queries or suggestions regarding any changes that you would like to incorporate, please feel free to contact me at 555444333 or send me a mail on smith.jones@asdassociates.com.

Yours Truly,
Smith Jones,
CEO ASD Associates.

For ASD Associates,
(Signature)_____
Smith Jones.

For ZXC Constructions:
(Signature)______
Stevens Connery.

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