A letter of intent is intended to inform a contractor that the employer cannot currently enter into a contract for work, but that it can continue in alignment with drawings and specifications, and should work need to be halted for any reason, payment will be made for any work that has been completed.
However, when work commences on the basis of a letter of intent then the potential for litigation is quite high. It is certainly preferable for employers and contractors to enter into a formal agreement in the current JCT, or any other form of formal agreement that is acceptable to both parties.