Pre-contractual agreement

A pre-contractual agreement is a phase before officially signing a formal contract, where parties discuss and outline the main terms and intentions of their potential agreement. It helps ensure both sides are on the same page and understand what is expected, reducing misunderstandings. While it isn’t usually legally binding like a final contract, it can sometimes create obligations if certain commitments are made or legal principles like good faith apply. Essentially, it’s an early step in the negotiation process aimed at clarifying intentions and laying the groundwork for a formal agreement.