Document background
The Provisional Sales and Purchase Agreement is a crucial document used in Indian business transactions when parties wish to formalize their intent to enter into a sale transaction while allowing for due diligence and fulfillment of conditions precedent. This document type is particularly relevant when dealing with substantial assets, property transfers, or complex business transactions where immediate execution of a final agreement is not practical or desirable. It creates legally binding obligations while maintaining flexibility for parties to complete necessary investigations and satisfy regulatory requirements. Commonly used in both corporate and individual transactions, the agreement must comply with Indian contract law and related regulations, including the Indian Contract Act, 1872, and where applicable, sector-specific legislation. The provisional nature of the agreement allows parties to outline key terms while protecting their interests during the interim period before final execution.
