1.3 Pre-contractual agreements

Although the concept is a contradiction, there are agreements that precede agreements. This section discusses two documents that precede agreements such as those in the remainder of this chapter:

Non-disclosure agreement: an agreement that is used to ascertain that information exchanged in the pre-contractual stage of assessment or negotiations on a subsequent agreement (a) will be used only for the purpose of the anticipated transaction (and not for any other, competitive purpose), and (b) that all disclosed (confidential) information will be kept secret.

Memorandum of Understanding (MOU) or Letter of intent (LOI): a short document outlining the initial views and (non-binding) intentions of the parties, as well as their preliminary mutual understanding, in order to structure or facilitate subsequent negotiations of a definitive agreement.