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Can we have an intent to issue a letter of intent?

I have recently come across a few instances in which the letter of intent is issued after commencement on site. The reasoning behind letters of intent was to enable an early start, before the contract terms had been finalised (or in the case of sub-contracts before the main contract had been executed).

There is no logic in starting on site before issue of the letter of intent or, more likely, issuing the letter of intent after site start.

If disputes arise, the resolver will have to determine what terms apply. As we saw in Westminster Building -v- Andrew Beckingham, a site start during negotiations may amount to acceptance by performance of whatever happened to be the latest 'offer' - the sort of situation which regularly appears in part 1A examinations!

Let us assume that work has started, say on the oral assurances that a letter of intent would be issued 'within days' but it is some two months before the letter appears:

1. Would the letter of intent need to be accepted by the other party?

2. If so, is consideration needed and present?

3. Is acceptance by performance possible?

4. What conditions applied between site start and issue of the letter of intent (no contract - terms of contract as agreed to date - letter of intent)?

5. Can the party which did not issue the letter of intent avoid 'agreement' until it knows whether it would have an advantage by accepting the letter of intent?

6. If so, is it right and proper for a party to be able to adopt a 'sit and wait' policy?

OK, there are many variables and I would not want to make a decision without full argument. I would, however, welcome observations from members.

Peter Horne

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