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.
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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
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
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
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