Letter of Intent to Enter into a Contract by tgg15634


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									                                      Letter of Intent

A “letter of intent” is a written preliminary contractual document that authorizes
WHOSIT or WHOSIT’s subcontractor’s to begin work. It is customarily employed to
reduce to writing a preliminary understanding of parties who intend to enter into contract.
It gives the owner authority to proceed prior to the execution of a more formal contractual
document between both parties. In some cases, both WHOSIT and the client or
WHOSIT and it’s subcontractors, have completed or nearly completed contract
negotiations and are awaiting internal reviews and approvals. Occasionally a situation
emerges rapidly which requires immediate action. It may be more appropriate to define a
specific limited scope of work and issue a purchase order to cover the limited
requirements, pending the negotiation of a complete scope of work with complete

Letters of intent should be limited in duration and total financial obligation. Letters of
intent must lead to a fully defined contract or be subject to a negotiated settlement
agreement due to the parties not reaching agreement on the continued progress of the

A letter of intent should be as complete and definite as possible. This may include the
general provisions for the contract type. It should definitely include a funding limitation
or ceiling not to exceed price as well as a description of a mini scope of work/schedule.

Letters of intent should be terminated and negotiated into a fully executed agreement as
soon as possible. Since a letter of intent does not include all of the standard terms and
conditions and may not allow for payment for expenditures, it is in the best interest of all
parties to finalize a negotiated agreement soon after it is issued.

A sample letter of intent follows as Attachment A.

                                              1      b681ce6a-4ba1-4d55-a068-a7c66105f560.doc
                                          Letter of Intent

Dismantle Consultants, Ltd.
Attn: Mr. -------- ---------------
------------, ----- ------------

Subject: Letter of Intent
       Site: --------------------------

Dear Mr. ------------------:

Whosit Construction Company has reviewed all submitted proposals for the subject
laboratory and is pleased to inform you that Dismantle Consultants, Ltd. is the apparent
successful bidder. This Letter of Intent is offered to award preliminary funding for your

You are hereby authorized to perform services as outlined in Whosit specification
# xxxxxx, part --, up to a funding limitation not to exceed $ xxx.00. The project
schedule is referenced in Whosit document # xxxxxxxxx. You should immediately
submit, via fax, your company insurance certificate, naming Whosit Construction
Company and the (owner) as additional insureds.

It is the intent of Whosit Construction Company to enter into a formal subcontract
agreement with Dismantlement Consultants, Ltd., with funding as released per a Whosit
purchase order, within four (4) weeks. The terms and conditions of the Whosit
Subcontract Agreement and Purchase Order will take precedence over this Letter of

We look forward to working with your organization on this important project. We will
contact you shortly to commence contract negotiations.

Very Truly Yours,

--------- ---- ----------
Purchasing Manager

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