The Pre Agreement Contract serves as an essential tool in New Zealand business transactions where parties need to formalize their preliminary arrangements before committing to a final agreement. This document is particularly valuable in complex transactions requiring detailed due diligence, extensive negotiations, or regulatory approvals. It establishes the groundwork for future collaboration while protecting both parties' interests during the preliminary phase. The document typically includes provisions for confidentiality, exclusivity if required, and the framework for moving toward a definitive agreement. Under New Zealand law, this type of agreement carries specific legal implications and should be carefully drafted to ensure enforceability while maintaining flexibility for the final agreement terms. The Pre Agreement Contract is commonly used in situations involving significant commercial transactions, property developments, business sales, or joint ventures where parties need to commit resources to the preliminary phase while maintaining legal protection.
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1. Parties: Identification and details of all parties involved in the pre-agreement
2. Background: Context and circumstances leading to the pre-agreement
3. Definitions: Key terms and their meanings as used in the pre-agreement
4. Purpose and Scope: Clear statement of the pre-agreement's purpose and its intended scope
5. Duration: Timeframe for the pre-agreement and conditions for extension or termination
6. Preliminary Obligations: Key responsibilities and commitments of each party during the pre-agreement period
7. Path to Final Agreement: Process and conditions for moving from pre-agreement to final agreement
8. Confidentiality: Terms regarding the handling of confidential information exchanged during the pre-agreement period
9. Good Faith: Commitment to negotiate and act in good faith during the pre-agreement period
10. Costs and Expenses: Allocation of costs incurred during the pre-agreement period
11. Governing Law: Specification of New Zealand law as the governing law
12. Execution: Signature blocks and execution details
1. Exclusivity: Terms preventing parties from negotiating with others during the pre-agreement period - include when exclusive negotiations are required
2. Due Diligence: Framework for information sharing and verification - include when substantial due diligence is needed
3. Break Fee: Compensation payable if one party withdraws - include in high-value transactions
4. Intellectual Property Protection: Protection of IP rights during preliminary phase - include when IP is involved
5. Resource Allocation: Commitment of specific resources - include when significant resources are required during pre-agreement phase
6. Regulatory Compliance: Specific regulatory requirements - include when dealing with regulated industries
7. Dispute Resolution: Process for resolving disputes during pre-agreement period - include in complex arrangements
1. Schedule 1: Key Milestones: Timeline and key dates for the pre-agreement period and transition to final agreement
2. Schedule 2: Required Information: List of information and documents to be exchanged during the pre-agreement period
3. Schedule 3: Authorized Representatives: List of authorized representatives from each party
4. Appendix A: Term Sheet: Key commercial terms agreed in principle for the final agreement
5. Appendix B: Due Diligence Checklist: Detailed list of required due diligence items and documentation
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