preconstruction agreement

Letters of Intent in Construction: What They Bind and What They Don't

A letter of intent precedes the formal contract — the owner wants the contractor to start mobilizing, procuring long-lead items, or engaging on preconstruction while the main contract is still being negotiated. LOIs can bind both sides to specific commitments, but they're often ambiguous about what. Contractors who proceed under an LOI without understanding what it binds expose themselves to cost they can't recover.