Before the Ink Dries: Governing Pre-Contract Work Without Guesswork

There is a familiar moment on UK projects when the programme demands movement before the paperwork is complete. A supplier needs a deposit, a subcontractor needs a start date, or a site team needs to begin enabling works while the main contract is still in negotiation. The commercial response is often an early works agreement or a letter of intent. Used well, these instruments create a controlled start. Used loosely, they create a period of work with uncertain payment, disputed scope and no clear exit.

The purpose of a pre-contract instrument is not to pretend that a full contract exists. It is to define a limited period of authorised activity, with clear boundaries, so that both employer and contractor know what is committed and what remains subject to the main agreement. The discipline lies in treating that instrument as a commercial document in its own right, not as a placeholder to be tidied up later.

Why pre-contract work needs its own framework

Early works are often described as low risk because they are small in value or short in duration. That assumption rarely survives contact with a live site. Ground investigation, temporary works, procurement of long-lead items and design development can all create cost, liability and programme consequences that outlast the pre-contract period. If the main contract is delayed or never executed, the parties need to know what has been paid for, what has been instructed, who owns the design and how the arrangement ends.

A letter of intent can be useful for a narrow instruction over a short period. It is less suitable when the work is complex, when design responsibility is being transferred, or when the contractor will commit to suppliers and subcontracts. In those circumstances, a bespoke early works agreement is usually the more honest instrument. It should be written in plain terms and signed by someone with authority to commit the organisation.

Cap the commitment, not just the cost

A payment cap is only effective if it caps the right thing. An aggregate cap on instructed value is different from a cap on a single purchase order, and both are different from a cap on the employer's total liability. The agreement should state the maximum value that can be instructed, whether VAT is included, and what happens when the cap is approached. It should also confirm that work beyond the cap is not authorised unless varied in writing by a named representative.

Payment terms deserve the same precision. The agreement should identify the valuation dates, the evidence required, the period for assessment and the consequences of late payment. If the contractor is expected to place orders or pay deposits before the main contract, the agreement should say whether those commitments are recoverable if the main contract does not proceed. A cap without a payment mechanism is simply a number, and a payment mechanism without a cap is an open-ended commitment.

Draw the scope boundary in physical and documentary terms

Scope boundaries are often written as descriptions of activity rather than definitions of deliverable. That creates room for disagreement. A stronger approach is to define the areas of the site, the trades involved, the outputs required and the documents that will be produced. If the early works include design development, the agreement should identify the information that must be delivered and the standard to which it must be prepared.

The boundary should also address what is excluded. Exclusions are not an admission of weakness; they are a practical way of preventing the pre-contract period from absorbing work that belongs in the main contract. Where work is likely to overlap, the agreement should say how it will be valued and whether it will be treated as instructed work under the early works agreement or deferred to the main contract.

Design responsibility before the full appointment

Design responsibility is one of the most common gaps in pre-contract arrangements. A contractor may be asked to develop a design, engage a specialist or complete surveys before the main contract allocates design liability. If the early works agreement is silent, the parties may later disagree about who owns the resulting information and who bears the risk if it proves inadequate.

The agreement should identify the design responsibilities being undertaken, the applicable standards, the information deadlines and the consequences of late or incomplete information. It should also address ownership and use of design documents if the main contract is not signed. Where a specialist designer is engaged, the contractor should confirm that the appointment can be novated or assigned if required, and the employer should understand the limits of any warranty offered at the pre-contract stage.

Termination: an exit that leaves evidence, not argument

Every early works agreement should have a clear termination route. That includes termination for convenience, termination for default and termination on a longstop date if the main contract has not been executed. The agreement should state what happens to work in progress, how it will be valued, what demobilisation costs are recoverable and how site access will be returned.

Termination provisions should also protect the evidence trail. The parties should agree how instructions, valuations and correspondence will be recorded during the pre-contract period and how those records will be handed over. If the relationship ends, the employer should be able to take forward the work without depending on the contractor's goodwill, and the contractor should be able to substantiate the amount due.

The bridge into the main contract

The route into the full contract should be described before work begins. The agreement should identify the intended main contract form, the target execution date and the steps required to move from pre-contract work to the main appointment. If the early works are to be incorporated into the main contract, the mechanism should be clear: will the work be treated as part of the contract sum, valued separately, or novated through a design appointment?

The parties should also agree how the early works agreement will be brought to an end. A simple clause stating that the main contract supersedes the early works agreement is rarely enough. It should confirm which obligations survive, how payments are reconciled and whether any liabilities continue after execution.

A pre-mobilisation checklist for commercial teams

Before anyone sets foot on site, the commercial team should be able to answer the following questions in writing:

• Who is authorised to instruct work, and is every instruction required to be in writing?
• What is the maximum aggregate value that can be instructed, including VAT and provisional items?
• Which site areas, trades, deliverables and documents are within scope, and what is expressly excluded?
• Who is responsible for design, temporary works and information deadlines?
• What is the longstop date, and what happens if the main contract is not signed by then?
• How will work in progress be valued on termination, and what demobilisation costs are recoverable?
• Are insurance, site possession, welfare and health and safety arrangements confirmed?
• How will the early works be incorporated into the main contract, and which obligations survive?
• Is there a single register of instructions, valuations and correspondence?

Early works are not a loophole around contract execution. They are a commercial tool for managing a controlled start. The tool works best when the limits are written down, the payment route is clear and the exit is understood by both sides. That is not bureaucracy. It is the difference between mobilising with confidence and discovering the terms after the event.