Letter Of Intent To Award Construction Contract for Germany

Letter Of Intent To Award Construction Contract Template for Germany

A Letter of Intent to Award Construction Contract under German law (Absichtserklärung für die Vergabe eines Bauauftrags) is a formal pre-contractual document that outlines the intention to enter into a construction contract with a selected contractor. Operating within the framework of German civil law, particularly the BGB and VOB/B, this document serves as a preliminary commitment while final contract details are being finalized. It typically includes key commercial terms, project scope, conditions precedent, and may authorize preliminary works. The document must carefully balance showing serious intent while avoiding unintended binding obligations, considering German law's strict approach to pre-contractual obligations and liability.

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What is a Letter Of Intent To Award Construction Contract?

The Letter Of Intent To Award Construction Contract is a crucial document in German construction projects, typically used when parties have reached principal agreement on key terms but require additional time to finalize the full construction contract. Under German law, such letters require careful drafting due to the concept of culpa in contrahendo and the potential for creating binding obligations even in preliminary documents. This document bridges the gap between contractor selection and final contract execution, particularly important in complex construction projects where immediate action may be required before full contract finalization. It should clearly specify which provisions are binding and which are subject to final contract negotiation, while complying with German construction law requirements, including VOB/B standards where applicable.

What sections should be included in a Letter Of Intent To Award Construction Contract?

1. Letterhead and Date: Full company details of the party issuing the LOI, including registration details as required under German law

2. Recipient Details: Full details of the contractor including company name, address, and registration details

3. Subject Line: Clear identification of the document as a Letter of Intent (Absichtserklärung) for the specific construction project

4. Project Reference: Clear identification of the construction project, including reference to relevant tender documents or proposals

5. Expression of Intent: Clear statement of intention to award the construction contract, subject to specified conditions

6. Key Commercial Terms: Overview of principal terms including project scope, estimated contract value, and anticipated timeline

7. Conditions Precedent: Specific conditions that must be met before the final contract will be awarded

8. Timeline: Expected timeline for finalizing the main contract and key milestone dates

9. Validity Period: Period during which the Letter of Intent remains valid

10. Legal Status: Clear statement about the non-binding nature of the LOI (except for specified binding provisions)

11. Signature Block: Space for authorized signatures, including name and title of signatory

What sections are optional to include in a Letter Of Intent To Award Construction Contract?

1. Preliminary Works Authorization: Optional section authorizing specific preliminary works, if immediate start is required before full contract execution

2. Confidentiality Provisions: If specific confidentiality obligations need to be binding even before main contract execution

3. Exclusivity Period: If the parties agree to negotiate exclusively for a defined period

4. Cost Coverage: Terms for covering costs incurred during the preliminary period, if applicable

5. Insurance Requirements: If specific insurance must be in place during preliminary works

6. Dispute Resolution: If specific binding dispute resolution provisions are needed for the LOI period

What schedules should be included in a Letter Of Intent To Award Construction Contract?

1. Schedule 1 - Project Scope Summary: High-level summary of the construction works to be performed

2. Schedule 2 - Key Commercial Terms: Summary of main commercial terms agreed in principle

3. Schedule 3 - Timeline: Detailed timeline for contract finalization and project milestones

4. Appendix A - Relevant Correspondence: Key correspondence or tender documents referenced in the LOI

5. Appendix B - Preliminary Works Scope: If applicable, detailed scope of authorized preliminary works

6. Appendix C - Required Documentation: List of documents required from the contractor before final contract award

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Letter of Intent

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Construction

Real Estate Development

Infrastructure

Commercial Property

Industrial Development

Public Works

Residential Development

Healthcare Construction

Educational Facilities

Energy Infrastructure

Transportation Infrastructure

Retail Development

Relevant Teams

Legal

Construction

Project Management

Procurement

Finance

Commercial

Risk Management

Technical Services

Development

Contract Administration

Relevant Roles

Project Director

Construction Manager

Legal Counsel

Contract Manager

Chief Financial Officer

Development Director

Project Engineer

Procurement Manager

Risk Manager

Commercial Director

Technical Director

Managing Director

Head of Construction

Chief Executive Officer

Architectural Director

Cost Controller

Quantity Surveyor

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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