Many people heard the expression "agreement of intent". But what does it mean in practice, how to compile it and what needs to be taken into account when signing such a document?
The agreement of intent is inherently close to the preliminary agreement. However, it differs from it in a number of features. First of all, the agreement on intentions does not fix rigidly, but only articulates the will of the parties to sign a certain agreement in the future, to cooperate, jointly to engage in any activity. Most often, it does not specify a rigid time frame. We can say that the agreement on intentions has, rather, a psychological force than a legal one, precisely because of the vagueness of the wording. Secondly, this document, unlike the preliminary contract, does not impose obligations on the parties. It only indicates that in the future (as a rule, uncertain or stretched for several years), participants will consider various aspects of cooperation: from price conditions, specification of specific goods and services, from time to sanctions and jurisdiction. However, these details are not described by the agreement on intentions to conclude a contract (for example, sale, lease, transfer of rights, etc.).
Most often, such a document is drawn up in order to summarize, issue reports on various meetings and negotiations. In it, in a more or less formal form, the good will of the parties is recorded to continue and develop relations in the future. Often such documents are signed by various organizations and institutions - from government and diplomatic to charity and creative. However, the obligations, as well as sanctions for their violation, force majeure or specific deadlines are not provided. Nevertheless, the agreement on intentions becomes a milestone in the relations of the parties. It can serve as a kind of recommendation, confirmation of the reliability and prestige of the negotiators. Terms of termination for such a document are not usually implied, that is, the parties are free at any time to abandon their intentions and plans. The impact on the counterparty and the business community here is rather psychological. Signatories who wish to be considered serious partners, can not neglect their reputation and unreasonably reject plans.
The agreement on intentions of purchase and sale has The meaning of making in the case of especially large transactions. Often, after negotiating with potential partners, after discussing the general conditions and before concretizing them, the parties have the opportunity to both analyze and thoroughly study the reliability of the potential counterparty and predict the results of the transaction. At the same time, the agreement on intentions in this case gives more weight, solidity to the plans. Of course, it differs from both the promises and the preliminary contract, as it does not guarantee anything and does not impose obligations. Nevertheless, in business circles the signing of such a document is considered a good form.