The Intent to Purchase Agreement is a crucial document in Canadian business and real estate transactions, serving as a bridge between initial negotiations and the final purchase agreement. This document is typically used when a potential buyer has serious interest in acquiring assets, property, or a business but requires time for due diligence and securing financing before making a firm commitment. The agreement outlines key terms including price, timeline, and conditions, while typically maintaining flexibility for the final transaction. It provides protection for both parties during the pre-purchase phase by establishing binding obligations such as confidentiality and exclusivity, even though the final purchase obligation itself remains non-binding. Under Canadian law, these agreements must comply with both federal and provincial requirements, particularly when dealing with real estate or regulated industries.
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1. Parties: Identifies and provides full legal names and addresses of all parties involved in the agreement
2. Background: Explains the context and purpose of the agreement, including brief description of the intended purchase
3. Definitions: Defines key terms used throughout the agreement for clarity and consistency
4. Subject Matter: Detailed description of the property or assets intended to be purchased
5. Purchase Price: Specifies the intended purchase price and any pricing mechanisms or adjustments
6. Due Diligence: Outlines the buyer's right to investigate the subject matter and associated timeframes
7. Deposit: Details of any deposit required, including amount, payment terms, and conditions for refund or forfeiture
8. Conditions Precedent: Lists conditions that must be satisfied before proceeding with the final purchase
9. Timeline: Specifies key dates including due diligence period, final agreement execution, and closing
10. Confidentiality: Obligations regarding confidential information shared during the process
11. Binding Effect: Clarifies which provisions are binding and which are expressions of intent
12. Termination: Circumstances under which either party may terminate the agreement
13. Governing Law: Specifies the applicable law and jurisdiction governing the agreement
1. Exclusivity: Prevents seller from negotiating with other parties during the agreement period - include when requested by buyer
2. Break Fee: Specifies fees payable if either party terminates the agreement - include in high-value transactions
3. Financing Contingency: Conditions related to buyer's ability to secure financing - include when buyer requires financing
4. Environmental Matters: Specific provisions regarding environmental due diligence - include for real estate or industrial assets
5. Employee Matters: Provisions regarding employment continuity - include when purchase involves business assets with employees
6. Broker/Finder's Fees: Provisions regarding any intermediary fees - include when brokers or agents are involved
7. Public Announcements: Controls over public communications - include for high-profile or sensitive transactions
1. Schedule A - Description of Subject Matter: Detailed description of property or assets to be purchased
2. Schedule B - Purchase Price Calculation: Detailed methodology for calculating final purchase price, if complex
3. Schedule C - Due Diligence Requirements: List of required due diligence items and documentation
4. Schedule D - Timeline: Detailed timeline with all key dates and deadlines
5. Appendix 1 - Form of Confidentiality Agreement: Standard form of confidentiality agreement if required
6. Appendix 2 - Required Approvals: List of required regulatory or third-party approvals
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