Document background
The Construction Letter of Intent serves as a crucial bridging document in Canadian construction projects, used when parties have reached preliminary agreement on key terms but need to begin certain activities before finalizing the main construction contract. This document is particularly relevant when there's urgency to commence preliminary works such as design development, site preparation, or long-lead procurement, while contract details are being finalized. Operating within Canadian construction law framework, including provincial Construction Acts and federal regulations, it typically authorizes specific preliminary activities while limiting financial exposure and clearly defining which elements are binding. The LOI needs to carefully balance enabling project progress with protecting both parties' interests, especially considering Canadian construction lien rights and prompt payment legislation.
