A Preliminary Agreement is commonly used in Singapore business transactions when parties need to formalize their initial understanding while maintaining flexibility for detailed negotiations. This document type is particularly valuable in complex transactions where parties need to establish basic terms, confidentiality obligations, and exclusivity arrangements before committing to a full agreement. Under Singapore law, the Preliminary Agreement can create binding obligations for specific terms while keeping other elements non-binding, allowing parties to proceed with due diligence and detailed negotiations with clear parameters and protections.
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1. Parties: Identification and details of all parties to the agreement
2. Background: Context and purpose of the preliminary agreement
3. Definitions: Key terms used throughout the agreement
4. Subject Matter: Core terms of what is being agreed to
5. Duration: Timeline for the preliminary agreement
6. Binding Effect: Specifies which provisions are legally binding
1. Confidentiality: Protection of sensitive information exchanged during preliminary negotiations
2. Exclusivity: Restrictions on dealing with other parties during the preliminary agreement period
3. Costs: Allocation of expenses incurred during the preliminary phase
4. Break Fee: Compensation provisions if the anticipated transaction doesn't proceed
1. Timeline: Detailed schedule of key dates and milestones
2. Due Diligence Requirements: List of required documents and information for review
3. Term Sheet: Key commercial terms agreed in principle
4. Authorized Representatives: List of designated contact persons for each party
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