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Smart Law Solicitors LLP Cambridge offers clear and solution-focused legal advice to businesses and private individuals Working together with our clients to make Cambridge a better place to do business.

The Trapezium
186A Victoria Road
Cambridge
CB4 3LG
Tel: 01223 321402

Areas of Practice

Wills, Probate and Power of Attorney

Contract Law: Carlill's Smoke Ball explained


News

Letters of Intent

Letters of intent are often used in the construction industry. They should do what it says on the tin; an expression in writing of a party’s intention to enter into a binding contract at a future date. The letter itself is not intended to be binding.

Here’s where the hidden problem is. If it has not been properly drafted it may be considered binding in Court. In the absence of a later contract, the letter of intent may be treated as a binding contract if a dispute arises.

We are acting in two cases involving such letters. In one, the client is suing under such a letter to claim for money owed for building works carried out. There was no later contract as the parties could never agree what form it should take.

In the second scenario, another client has asked us to draft a letter of intent which is not to be legally binding and is to be subject to a ‘formal variation’ of an existing contract.

It’s all down to the wording and careful drafting. Unless drafted with clarity, with letters of intent there may be trouble ahead….

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