The Pre-Contractual Agreement is essential in Hong Kong business transactions where parties need to establish ground rules before entering into detailed negotiations. It serves as a preliminary framework that protects parties' interests during the negotiation phase while maintaining the generally non-binding nature of discussions. This document is particularly important in Hong Kong's dynamic business environment, where cross-border transactions are common and protecting confidential information is crucial. The agreement typically includes provisions for confidentiality, exclusivity (if applicable), cost allocation, and the scope of proposed negotiations, while clearly stating which provisions are binding and which are not. It ensures compliance with Hong Kong's legal requirements while facilitating open and protected discussions between potential business partners.
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1. Parties: Full legal names and addresses of all parties involved in the pre-contractual discussions
2. Background: Context of the proposed transaction and purpose of entering into pre-contractual discussions
3. Definitions: Key terms used throughout the agreement, including 'Confidential Information', 'Proposed Transaction', etc.
4. Purpose and Scope: Detailed description of the proposed transaction and scope of preliminary discussions
5. Non-Binding Nature: Clear statement that discussions are preliminary and non-binding, except for specific clauses
6. Binding Obligations: Specific provisions that are binding (typically confidentiality, costs, and governing law)
7. Confidentiality: Obligations regarding the protection and non-disclosure of confidential information
8. Duration and Termination: Period for which the pre-contractual agreement remains in effect and termination provisions
9. Costs: Each party's responsibility for their own costs during preliminary discussions
10. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and jurisdiction for disputes
1. Exclusivity: Used when parties agree not to negotiate with other parties for a specified period
2. Break Fee: Include when parties agree on compensation if one party withdraws from negotiations
3. Cost Sharing: Used when parties agree to share certain costs during the preliminary phase
4. Intellectual Property: Include when preliminary discussions involve sharing of IP or creation of new IP
5. Due Diligence Process: Used when setting out the framework for conducting due diligence
6. Regulatory Approvals: Include when proposed transaction may require regulatory notifications or approvals
7. Non-Solicitation: Used to prevent parties from soliciting each other's employees or clients during negotiations
1. Schedule 1 - Authorized Representatives: List of authorized representatives from each party who will conduct negotiations
2. Schedule 2 - Scope of Proposed Transaction: Detailed description of the proposed transaction or collaboration
3. Schedule 3 - Timetable: Proposed timeline for negotiations and key milestones
4. Schedule 4 - Confidential Information: Detailed description or categories of information deemed confidential
5. Schedule 5 - Pre-Approved Third Party Disclosures: List of advisors or third parties to whom disclosure is pre-approved
6. Appendix A - Form of NDA: Standard form of confidentiality agreement for additional parties if needed
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