Document background
A Construction Letter of Intent is commonly used in New Zealand's construction industry when there is commercial pressure to commence works before a full construction contract can be finalized. This document typically becomes necessary when project timelines are tight, or when certain works need to begin while complex contract negotiations are still ongoing. The LOI must comply with New Zealand's Construction Contracts Act 2002 and related legislation, ensuring it provides adequate protection for all parties while maintaining flexibility. It should clearly define the scope of authorized early works, payment terms, and maximum financial commitment, while establishing how these interim arrangements will be incorporated into the final contract. The document is particularly crucial for projects involving long-lead items or where early contractor involvement is essential for design development.
