A letter of intent that describes acceptance as conditional upon entry into a formal subcontract, and contains a deeming clause stating that commencement is 'deemed to be full acceptance' of the subcontract terms, does not operate as an offer capable of acceptance by commencement of works so as to create a fourth class Masters v Cameron contract. The deeming clause is properly construed as giving retrospective effect to the formal contract once executed, not as creating a separate contract. Where claims are conditionally abandoned (subject to an outstanding amendment application), the court retains discretion to refuse judgment on those claims, and the conditional nature of the abandonment is relevant both to the question of judgment and to costs.
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