The Preliminary Agreement is a crucial document in UAE business transactions, used when parties need to formalize their initial commitments and outline the path toward a final agreement. This document type is particularly relevant in complex commercial transactions where detailed due diligence, regulatory approvals, or extensive negotiations are required before finalizing the main agreement. The Preliminary Agreement establishes binding obligations while maintaining flexibility for the parties to develop their relationship. It must comply with UAE Civil Code requirements and often includes provisions for exclusivity periods, confidentiality obligations, and conditions precedent. Commonly used in mergers and acquisitions, joint ventures, real estate developments, and major commercial contracts, this document provides legal protection during the pre-contractual phase while parties work towards their ultimate business objectives.

1. Parties: Identification of all parties to the agreement, including full legal names, registration details, and addresses

2. Background: Context of the proposed transaction and purpose of the preliminary agreement

3. Definitions and Interpretation: Key terms used in the agreement and rules for interpretation

4. Scope of Preliminary Agreement: Clear outline of what is covered by this preliminary agreement and its temporary nature

5. Duration and Term: Period during which the preliminary agreement remains valid and any extension provisions

6. Conditions Precedent: Conditions that must be satisfied before proceeding to the main agreement

7. Interim Obligations: Parties' obligations during the preliminary period, including due diligence requirements

8. Confidentiality: Obligations regarding confidential information exchanged during the preliminary period

9. Exclusivity: Terms preventing parties from negotiating with other parties during this period

10. Costs and Expenses: Allocation of costs incurred during the preliminary period

11. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes

12. Termination: Circumstances under which the preliminary agreement can be terminated

13. Entire Agreement: Confirmation that this document represents the entire preliminary agreement between parties