The Subcontractor Letter of Intent is commonly used in Hong Kong's construction industry when there is a need to commence subcontract works before finalizing the full subcontract documentation. This document serves as a bridging agreement, typically issued by main contractors to subcontractors, authorizing the commencement of specific works or preparations while detailed terms are being negotiated. The LOI includes essential elements such as scope description, pricing basis, payment terms, and duration, while being governed by Hong Kong law. It's particularly valuable in fast-tracked projects or when early engagement of subcontractors is critical for project success. The document provides temporary contractual protection while limiting exposure for both parties, usually with a defined validity period or maximum commitment value.
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1. Letter Header: Date, addressee details, and project reference
2. Project Identification: Clear identification of the project, location, and main contract reference
3. Intent Statement: Clear statement of intent to enter into a subcontract subject to conditions
4. Scope of Works: Brief description of the intended subcontract works
5. Contract Sum: Anticipated contract value or pricing mechanism
6. Interim Authority: Authority to proceed with specific preliminary works
7. Duration: Validity period of the LOI and expected date for formal subcontract
8. Payment Terms: Interim payment arrangements for work under the LOI
9. Governing Law: Confirmation of Hong Kong law as governing law
10. Signature Blocks: Space for both parties to execute the LOI
1. Insurance Requirements: Include when early works involve site access or high-risk activities
2. Parent Company Guarantee: Include when dealing with subsidiary companies or significant contract values
3. Confidentiality: Include when sensitive information will be shared during early works
4. Design Responsibility: Include when early works involve design elements
5. Bonds and Securities: Include when significant advance payments are involved
6. Dispute Resolution: Include when LOI covers substantial works or extended period
1. Schedule 1 - Preliminary Scope of Works: Detailed description of works authorized under the LOI
2. Schedule 2 - Interim Rates and Prices: Agreed rates and prices for work under the LOI
3. Schedule 3 - Key Personnel: List of key personnel authorized to manage and execute the works
4. Schedule 4 - Programme of Works: Timeline for preliminary works and subcontract finalization
5. Appendix A - Site Access Requirements: Site access protocols and requirements if early access is needed
6. Appendix B - Form of Subcontract: Draft or reference to the intended form of final subcontract
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