Agreement of Intent
Preparation of an agreement of intent, advice to clients on the conclusion of an interim agreement
In modern business practice, it has become customary to draw up preliminary oral agreements in writing, for example, between the parties to a future transaction, and this can be applied by both individuals and legal entities. Legislatively, the definition of "agreement of intent" is not enshrined in regulatory documents, however, in accordance with paragraph 2 of Article 421 of the Civil Code of the Russian Federation, the parties may conclude an agreement, whether or not provided for by law or other legal acts. In this regard, the parties, having agreed among themselves, have the right to conclude an agreement of intent, as a form of contract not provided for by civil law.
Considering that there is no specific definition in the legislation, such a document can be called differently: an agreement, an agreement, a protocol, etc. Such a document is a formalized agreement in which the parties reflect their will to interact and cooperate with each other on specific issues in the future. This, in fact, is a documentary reflection of all oral agreements of the parties.
Due to the fact that there is no clear legislative definition of an agreement of intent, the specific form of such an agreement is not defined in the legislation. An agreement of intent is drawn up to specify verbal agreements and further mutually beneficial cooperation between the parties to the agreement and, as a general rule, the parties do not have the right to force the other party to conclude the main contract in the future. Using the customs of business, as a rule, in an interim agreement, the parties reflect:
- Title of the document.
- Place of its compilation and date.
- Parties participating in the agreement of intent.
- Basic terms of the agreement or conditions for further interaction between the parties.
- Deadline for performing actions under the agreement of intent.
- Details and signatures.
It is important to understand that the purpose of an agreement of intent is to fix intentions and readiness for further cooperation between the parties to the agreement, and not to establish obligations. The parties are not obliged to conclude an agreement of intent by law, therefore, the parties are not obliged to conclude such an agreement, but given the practice of business turnover, an agreement of intent is nevertheless concluded between cooperating participants in business activities.
It is important to distinguish an agreement of intent from a preliminary agreement, which is an agreement in which the parties prescribe the terms of a future transaction, and an agreement of intent is a document in which the parties regulate the terms of future cooperation. At the same time, only a preliminary agreement can force the counterparty to conclude the main agreement, this is provided for by the norm of paragraph 5 of Article 429 of the Civil Code of the Russian Federation, which says that in cases where the party that entered into the preliminary agreement evades concluding the main agreement, provisions are applied that give the right to apply to the court with a demand for coercion to conclude an agreement. The requirement to compel the conclusion of the main contract may be filed within 6 months from the date of non-fulfillment of the obligation to conclude the contract.
Regardless of the name of the document, the court may reclassify the interim agreement as a preliminary agreement if the agreement contains signs of a preliminary agreement and it does not matter what this document will be called. Under all other conditions, in order for the rules of the preliminary contract not to apply to the agreement of intent, the text of the agreement must include a clause that the agreement is not a preliminary contract and obliges the parties to conclude a specific contract.
Registration of legal relations by a written document is a significant component in the interaction of the parties with each other. Such a document may be evidence that the parties have been negotiating and planning future interaction. It is important to draw up an agreement of intent in such a way that it does not have the signs of a preliminary contract, while reflecting all the main agreements between the parties.
Business participants can draw up an agreement of intent on their own or resort to the help of a qualified specialist who will study all aspects of the interaction of the parties and competently reflect them in an agreement of intent, without unnecessary obligations, while reflecting all the main positions of the future interaction of the parties. At the same time, it is important to understand that the absence of obligations in the agreement of intent to conclude the main contract in the future is a legal aspect of such a document, and one should not forget about entrepreneurial reputation. Failure to comply with the agreement of intent may characterize the entrepreneur as an unscrupulous market participant and lower his rating as a participant in business processes.
The assistance of an experienced and qualified specialist in drawing up an agreement of intent will allow the contracting parties to reflect all wishes, consolidate important aspects of the agreed agreements and achieve the most beneficial results for the parties, in which all the interests of the contracting parties will be taken into account.
- Advising clients on the issues of concluding an interim agreement
- Legal analysis of information and study of the situation in which the client needs to conclude an agreement of intent
- Preparation and execution of an agreement of intent
- Representing the interests of the client in the preparation and signing of an interim agreement
- Representing the interests of the client in the event of disputes arising from the interaction of the parties after the execution of an agreement of intent