Letter of Intent (LOI) is one of the common tools used in the engineering and construction industries. This is to commence execution activities before signing the contract between the parties. It is widely used for multiple reasons. However, LOIs have embedded risks that may result in a collapse of the relationship between the parties before signing the contract which may ended up in court rooms trying to resolve disputed items. This paper will highlight why LOIs are being used, what the risks are and how to mitigate them with an overview of some real-life cases.