The Construction Letter of Intent is a crucial document in Swiss construction projects, typically used when parties have reached preliminary agreement on key terms but require a formal framework for pre-construction activities before executing the final construction contract. It serves as a bridge between initial negotiations and the final agreement, allowing parties to commence preliminary works while finalizing contract details. Under Swiss law, particularly the Swiss Code of Obligations, such letters must carefully balance expressing serious intent while avoiding unintended binding obligations. The document typically includes provisions for exclusivity, cost allocation, and preliminary works, while clearly stating which provisions are binding and non-binding. It's particularly valuable in complex construction projects where significant preliminary work or investigation is required before final contract execution.
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1. Letter Header and Date: Formal business letter header including sender's and recipient's details and date
2. Project Identification: Clear identification of the construction project, including location and basic scope
3. Purpose Statement: Statement clarifying the purpose of the LOI and its non-binding nature (except for specified provisions)
4. Key Commercial Terms: Outline of main commercial terms including estimated project value and preliminary timeline
5. Scope of Pre-Construction Activities: Description of permitted preliminary work and investigations
6. Duration and Exclusivity: Period for which the LOI is valid and any exclusivity arrangements
7. Binding Provisions: Explicitly stated binding elements (typically confidentiality, exclusivity, and costs)
8. Next Steps: Clear outline of the process toward final contract execution
9. Cost Responsibility: Statement on who bears costs incurred during the LOI period
10. Signature Block: Space for authorized signatures from both parties
1. Permit Requirements: Include when specific permits or authorizations are needed for preliminary works
2. Payment Terms for Preliminary Work: Include when preliminary work will be compensated regardless of final contract execution
3. Insurance Requirements: Include when preliminary work involves site access or significant risks
4. Termination Rights: Include when parties want specific termination provisions beyond simple expiration
5. Dispute Resolution: Include when parties want specific dispute resolution procedures for the LOI period
6. Third Party Rights: Include when other stakeholders (e.g., architects, consultants) need to be referenced
1. Preliminary Scope of Works: High-level description of the proposed construction works
2. Site Plan: Preliminary plans showing the construction site and proposed works
3. Timeline: Indicative project timeline including key milestones and decision points
4. Pre-Construction Activities: Detailed list of permitted activities during the LOI period
5. Key Commercial Terms Sheet: Summary of main commercial terms to be included in final contract
6. Authority Matrix: List of key personnel and their authority levels for the LOI period
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