The Letter Of Intent Engineering is a crucial preliminary document used in Pakistani engineering and construction projects to establish the framework for future contractual relationships. It serves as a stepping stone between initial discussions and the final engineering contract, typically used when parties have agreed on basic terms but need time to negotiate detailed agreements. This document, while primarily non-binding except for specific provisions like confidentiality and exclusivity, outlines key commercial terms, project scope, and timeline commitments. It's particularly relevant in complex engineering projects where detailed contract negotiations may take considerable time, but parties need to demonstrate commitment and potentially begin preliminary works. The document must comply with Pakistani legal requirements, including the Contract Act 1872 and Pakistan Engineering Council regulations, while providing sufficient flexibility for final contract negotiations.
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1. Parties: Identification of the parties involved - the potential client/employer and the engineering contractor/consultant
2. Background: Brief context of the proposed engineering project and the purpose of the LOI
3. Definitions: Key terms used throughout the LOI
4. Project Scope: High-level description of the engineering services or works to be performed
5. Duration and Timeline: Proposed period for negotiating the final agreement and preliminary project timeline
6. Commercial Terms: Preliminary agreement on key commercial aspects including estimated budget range
7. Exclusivity Period: Period during which parties agree to negotiate exclusively with each other
8. Confidentiality: Obligations regarding confidential information exchanged during negotiations
9. Good Faith Negotiations: Commitment to negotiate the final agreement in good faith
10. Non-Binding Provisions: Clear statement of which provisions are non-binding, typically all except confidentiality and exclusivity
11. Governing Law: Specification that Pakistani law governs the LOI
12. Signatures: Execution block for authorized representatives of both parties
1. Preliminary Works: Used when certain engineering activities need to start before the final agreement is signed
2. Cost Reimbursement: Include when parties agree to reimburse certain costs incurred during the LOI period
3. Break Fee: Used when parties want to include compensation if negotiations fail for specific reasons
4. Due Diligence: Include when specific due diligence activities need to be conducted during the LOI period
5. Regulatory Compliance: Used when specific Pakistani engineering regulations or permits need to be addressed early
6. Intellectual Property: Include when preliminary design work or technical information will be exchanged during negotiations
1. Preliminary Scope of Work: High-level technical description of the proposed engineering services
2. Initial Project Timeline: Preliminary schedule of key milestones and deadlines
3. Key Commercial Terms: Summary of main commercial points to be negotiated
4. Required Approvals: List of necessary regulatory and corporate approvals
5. Key Personnel: List of key engineering and management personnel involved in negotiations
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