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Pre Contract Agreement for New Zealand

Pre Contract Agreement Template for New Zealand

A Pre Contract Agreement under New Zealand law is a preliminary legal document that establishes the framework for future negotiations and potential agreements between parties. It outlines key terms, conditions, and expectations while clearly distinguishing between binding and non-binding provisions. This document serves as a crucial stepping stone in complex transactions, providing protection for confidential information and establishing timelines for reaching a final agreement. Governed by New Zealand's Contract and Commercial Law Act 2017, it includes provisions for exclusivity, cost allocation, and termination rights while maintaining flexibility for future negotiations.

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What is a Pre Contract Agreement?

The Pre Contract Agreement is a vital instrument in New Zealand business transactions, typically used when parties are entering into complex negotiations that require a structured framework before finalizing a formal contract. It serves multiple purposes: protecting confidential information exchanged during negotiations, establishing exclusivity periods, and defining the basic terms and conditions that will form the foundation of the final agreement. This document is particularly relevant in situations involving significant commercial transactions, property developments, business acquisitions, or joint ventures. While not all terms in a Pre Contract Agreement are necessarily binding, certain provisions (such as confidentiality and exclusivity) can create immediate legal obligations under New Zealand law. The document provides clarity and direction while maintaining sufficient flexibility for detailed negotiations of the final agreement.

What sections should be included in a Pre Contract Agreement?

1. Parties: Details of all parties entering into the pre-contract agreement, including full legal names and addresses

2. Background: Context of the proposed transaction or relationship, including the parties' intentions to enter into a formal agreement

3. Definitions: Key terms used throughout the agreement

4. Purpose and Scope: Clear statement of the agreement's purpose and the scope of the proposed transaction or relationship

5. Binding and Non-binding Terms: Explicit identification of which terms are legally binding and which are subject to negotiation

6. Confidentiality: Obligations regarding the protection and non-disclosure of confidential information exchanged during negotiations

7. Duration and Timelines: Period for which the pre-contract agreement remains valid and key milestones for reaching the final agreement

8. Exclusivity: Terms preventing parties from negotiating with other parties during the specified period

9. Costs and Expenses: Allocation of costs incurred during the negotiation period

10. Termination: Circumstances under which the pre-contract agreement can be terminated

11. Governing Law: Specification that New Zealand law governs the agreement

What sections are optional to include in a Pre Contract Agreement?

1. Good Faith Obligations: Additional provisions requiring parties to act in good faith during negotiations - useful for complex or high-value transactions

2. Break Fee: Provisions for compensation if one party withdraws - relevant for significant commercial transactions

3. Intellectual Property Protection: Provisions protecting IP rights during the negotiation phase - important when sharing technical or proprietary information

4. Due Diligence Process: Framework for conducting due diligence - necessary for business acquisitions or major investments

5. Regulatory Compliance: Specific compliance requirements - needed when the proposed transaction requires regulatory approvals

6. Assignment: Rights to assign the agreement - relevant for complex commercial arrangements

7. Force Majeure: Provisions for unforeseen circumstances - useful for long-term negotiation periods

What schedules should be included in a Pre Contract Agreement?

1. Schedule 1: Key Commercial Terms: Outline of the main commercial terms under consideration for the final agreement

2. Schedule 2: Proposed Timeline: Detailed timeline for negotiations, due diligence, and completion of the final agreement

3. Schedule 3: Required Documentation: List of documents and information to be exchanged during the negotiation period

4. Appendix A: Form of Confidentiality Agreement: Standard form confidentiality agreement if separate from main document

5. Appendix B: Initial Term Sheet: Preliminary terms agreed between the parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

New Zealand

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions



































Clauses






























Relevant Industries

Real Estate

Technology

Manufacturing

Professional Services

Construction

Retail

Healthcare

Financial Services

Agriculture

Energy

Transportation

Education

Telecommunications

Mining and Resources

Entertainment and Media

Relevant Teams

Legal

Commercial

Business Development

Procurement

Operations

Finance

Risk and Compliance

Corporate Development

Strategy

Executive Leadership

Mergers and Acquisitions

Relevant Roles

Chief Executive Officer

Managing Director

Commercial Director

Legal Counsel

Contract Manager

Business Development Manager

Project Manager

Procurement Manager

Operations Director

Chief Financial Officer

Investment Manager

Property Developer

Merger & Acquisition Specialist

Company Secretary

Risk Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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