A pre-contract agreement, also known as a letter of intent or memorandum of understanding, is a document that outlines the intention of two parties to enter into a formal agreement. It is often used in business negotiations to establish the basic terms of a future contract. Although a pre-contract agreement is not legally binding, it can help to avoid misunderstandings and disputes by clarifying the expectations of the parties involved.

If you are about to enter into a pre-contract agreement, it is crucial to have a sample document as a guideline. Here is a sample pre-contract agreement that you can use as a template for your own negotiations:

[Name of Parties]

[Address of Parties]

[Date]

Dear [Name of Recipient],

This letter serves as a pre-contract agreement between [Name of Parties] for the purpose of [Purpose of Agreement]. The parties agree to enter into a formal agreement on the same terms and conditions as set forth in this letter, subject to further negotiation, due diligence, and final approval.

1. Scope of Agreement

The parties agree to cooperate and negotiate in good faith with the aim of entering into a formal agreement for [Purpose of Agreement]. The scope of the agreement shall include [Specific Details of Agreement].

2. Duration of Agreement

This pre-contract agreement shall remain in effect until [Date of Termination] or until the parties have entered into a formal agreement, whichever occurs first. Either party may terminate this agreement at any time by giving written notice to the other party.

3. Confidentiality

The parties agree to keep all information related to this pre-contract agreement confidential and not to disclose it to any third party without the prior written consent of the other party.

4. Non-Binding Nature

This pre-contract agreement is not a binding contract and does not create any legal obligations on the parties, except for the duty to negotiate in good faith and to maintain confidentiality.

5. Governing Law

This pre-contract agreement shall be governed by and construed in accordance with the laws of the state of [Name of State].

6. Entire Agreement

This pre-contract agreement contains the entire understanding of the parties and supersedes all prior negotiations, understandings, and agreements between the parties.

7. Signature

This pre-contract agreement may be signed and executed in counterparts and by electronic means. The parties agree that electronic signatures shall have the same legal effect as handwritten signatures.

If the foregoing accurately reflects our understanding, please sign below and return a copy to indicate your acceptance of the terms set forth in this pre-contract agreement.

Sincerely,

[Name of Sender]

Agreed and Accepted:

[Name of First Party] [Name of Second Party]

[Signature] [Signature]

[Date] [Date]

In conclusion, a pre-contract agreement can be a useful tool for businesses to formalize their intentions before entering into a binding contract. By using this sample as a guideline, you can customize it to meet your specific needs and ensure a smooth negotiation process.