Imagine this scenario: It's late in the afternoon, and a general
contractor to whom you recently submitted a bid on a reroofing
project calls you. The general contractor informs you that your
company will be awarded the subcontract to perform the reroofing
work. A few days later, you receive a letter of intent from the
general contractor. The letter reiterates you have been awarded the
subcontract and directs you to proceed with preparations for the
work, including obtaining the necessary permits, ordering the
required materials and preparing all relevant submittals. The
letter also states a form subcontract will be forwarded to you soon
for review and signature.
You do as instructed, incurring the costs of the permits,
materials and preparation of the project submittals. The general
contractor is anxious to get the job going, so you even perform
some preliminary tear-off work while you attempt to negotiate the
Ultimately, negotiations fall through because the general
contractor is not willing to agree to any revisions to its standard
subcontract form and you are not willing to take on the risks
associated with some of the more onerous provisions in the
subcontract. As a result, the general contractor decides to use
another roofing contractor for the project. In this situation, can
the letter of intent serve as a basis to recover the costs you have
incurred thus far?
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