The essential terms of a construction contract are price, Jackson v. Williams, 209 Ga. App. 640, 643, 434 pp.E.2d 98 (1993), volume of work, Burden v. Thomas, 104 Ga. App. 300, 121 S.E.2d 684 (1961), location, Harris v. Baker, 287 Ga. App. 814, 817, 652 p.E.2d 867 (2007), and sometimes time. See z.B. Jackson, 209 Ga. App.
at 643 (verbal construction contract inapplicable if there was no agreement on the equipment to be used for construction, the location of the construction, the estimated cost of the project or the time to completion). Correspondence agreements do not offer the specificity and clarity of standard form agreements, which can be detrimental to both parties. While, in some cases, correspondence agreements may be a necessary evil, the parties should ensure that the formal contract is performed as quickly as possible. A correspondence agreement should never be considered a substitute for a formal contract. There are relatively few cases that conclude that a statement of intent is of this type, given that courts usually attempt to enter into a contract from the letter on the basis of the alleged intentions of the parties. However, it must be objectively clear that the parties agreed, both on the issues deemed necessary by the parties themselves and on the issues objectively necessary for the creation of a contract. There will be no contract and the Memorandum of Understanding will be Type A if: the term “statement of intent” has no technical legal meaning and is used to describe all types of contracts. It is generally used to describe a letter from an employer addressed to a contractor (or from a prime contractor to a subcontractor) indicating the employer`s intention to enter into a formal written contract on the work described in the letter and asking the contractor to commence such work prior to the performance of the formal contract.
While a memorandum of understanding can be in many forms, it is essentially a communication that expresses the intention to enter into a contract at a later date. The success of construction depends on clearly defined expectations and timelines. Errors or delays have a negative impact on both owners and contractors, resulting in additional costs for owners, as they cannot use the property on the date set for the intended purpose and incur additional costs for the contractors` work and equipment. As a general rule, most declarations of intent fall into two categories: (a) as a binding intermediate contract or (b) as a non-binding declaration of cancellation. Since the legal differences between the two are important, it is important that the parties are clear and clear in their correspondence. Conversely, the lack of consensus on the conditions necessary for the implementation of an interim basic contract, such as, for example. B the necessary labor standard, is fatal to qualify a binding memorandum of understanding (Whittle Movers v Hollywood Express  EWCA Civ 1189).  1 Bruner &O`Connor Construction Law § 2:8, Express Contracts – Final Contract or “Agreement agreement” – Statements of Intent (updated August 2017).
The line between a binding agreement and a simple agreement on the agreement is thin, based on the facts and circumstances of each case: for some types of construction projects, you might need state permissions in addition to the construction contract before contractors can start working. RTS Flexible Systems against dairy  UKSC 14, however, highlights the difficulties associated with this. In this case, the employer sent a memorandum of understanding with a draft contract. It was essential that the MoU contained a “contrary to the treaty” clause stating that the terms are not binding if they are not signed and enforced by both parties. This has not been the case. However, the Supreme Court ruled that the Memorandum of Understanding nevertheless provided for a binding contract. . . .