Non Binding Purchase Agreement for Australia

Non Binding Purchase Agreement Template for Australia

A Non-Binding Purchase Agreement under Australian law serves as a preliminary document outlining the proposed terms and conditions for a potential purchase transaction. This document establishes the framework for negotiations while explicitly maintaining its non-binding nature, except for specific provisions such as confidentiality and exclusivity. It complies with Australian commercial law principles and practices, incorporating relevant considerations from the Competition and Consumer Act 2010 (Cth) and other applicable federal and state legislation. The agreement typically includes proposed pricing, payment terms, due diligence requirements, and timelines, while clearly stating that it does not create legally binding obligations regarding the main transaction.

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What is a Non Binding Purchase Agreement?

The Non-Binding Purchase Agreement is a crucial preliminary document used in Australian commercial transactions when parties wish to formalize their initial discussions and proposed terms without creating binding obligations. It serves as a stepping stone toward a potential definitive agreement, typically used during the early stages of significant transactions where parties need to conduct due diligence and negotiate detailed terms. This document type is particularly valuable in complex commercial purchases, mergers and acquisitions, and asset sales, where parties need to outline their intentions and establish a framework for negotiations while maintaining flexibility to withdraw. While governed by Australian law, it incorporates international commercial best practices and can be adapted for cross-border transactions. The agreement typically includes proposed commercial terms, due diligence requirements, and timelines, while clearly establishing which provisions are binding (such as confidentiality) and which are non-binding.

What sections should be included in a Non Binding Purchase Agreement?

1. Parties: Identification and details of all parties to the agreement

2. Background: Context of the proposed transaction and relationship between the parties

3. Definitions: Key terms used throughout the agreement

4. Non-Binding Nature: Clear statement that the agreement is non-binding and intended as an expression of current intent only

5. Subject Matter: Description of the goods or services to be potentially purchased

6. Proposed Price and Payment Terms: Indicative pricing structure and potential payment arrangements

7. Proposed Timeline: Anticipated timeline for negotiation, due diligence, and potential completion

8. Due Diligence: Framework for information sharing and investigation process

9. Confidentiality: Binding provisions regarding the confidentiality of shared information

10. Exclusivity Period: Any agreed period of exclusive negotiations

11. Costs and Expenses: Each party's responsibility for their own costs

12. Termination: How and when parties can withdraw from discussions

13. Governing Law: Applicable law and jurisdiction

What sections are optional to include in a Non Binding Purchase Agreement?

1. Good Faith Obligations: Optional binding provision regarding conduct during negotiations, useful for more complex transactions

2. Break Fee: Include when parties want to specify any compensation if one party withdraws under certain circumstances

3. Regulatory Approvals: Include when the potential transaction may require regulatory oversight or approval

4. Insurance: Include when specific insurance requirements need to be considered during due diligence

5. Intellectual Property Protection: Include when the due diligence process involves sharing of IP or technical information

6. Public Announcements: Include when either party is public or the transaction might attract media attention

7. Employee Matters: Include when the potential purchase involves transfer or consideration of employees

8. Environmental Matters: Include when the subject matter involves environmental considerations or risks

What schedules should be included in a Non Binding Purchase Agreement?

1. Schedule 1 - Description of Assets/Services: Detailed description of the subject matter of the potential purchase

2. Schedule 2 - Proposed Price Breakdown: Detailed breakdown of the proposed purchase price and payment structure

3. Schedule 3 - Due Diligence Requirements: List of required documentation and information for due diligence

4. Schedule 4 - Proposed Timeline: Detailed timeline with key milestones and deadlines

5. Appendix A - Required Documentation: List of documents to be provided during the due diligence process

6. Appendix B - Form of Confidentiality Agreement: Template of detailed confidentiality agreement if required

Authors

Alex Denne

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

Jurisdiction

Australia

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Retail

Technology

Real Estate

Mining and Resources

Healthcare

Professional Services

Agriculture

Transport and Logistics

Education

Construction

Financial Services

Telecommunications

Energy and Utilities

Relevant Teams

Legal

Finance

Mergers and Acquisitions

Procurement

Commercial

Business Development

Operations

Risk and Compliance

Corporate Development

Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Director

Commercial Director

Head of Mergers and Acquisitions

Legal Counsel

Corporate Lawyer

Business Development Manager

Procurement Manager

Operations Director

Investment Manager

Project Manager

Risk Manager

Compliance Officer

Strategy Director

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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