The Preliminary Agreement is a critical document used in Australian business transactions when parties need to formalize their initial discussions and establish ground rules for negotiating a more comprehensive agreement. It serves as a roadmap for negotiations while protecting both parties' interests through binding provisions on confidentiality, exclusivity, and governing law. This document type is particularly valuable in complex commercial transactions where detailed due diligence and extensive negotiations are anticipated. The Preliminary Agreement helps manage expectations, establish timelines, and allocate responsibilities during the negotiation phase, while clearly distinguishing between binding and non-binding commitments. It reflects Australian legal requirements and commercial practices, providing a balanced framework that facilitates progression toward a final agreement while maintaining appropriate legal protections for all parties involved.

1. Parties: Identification of all parties to the agreement, including full legal names, ABNs/ACNs, and registered addresses

2. Background: Context of the proposed transaction or relationship, including the purpose of entering into preliminary discussions

3. Definitions: Key terms used throughout the document, particularly technical or commercial terms specific to the proposed transaction

4. Purpose and Scope: Clear statement of the intended outcome and scope of both the preliminary agreement and the proposed final agreement

5. Binding and Non-Binding Provisions: Clear delineation of which provisions are intended to be legally binding and which are non-binding

6. Key Commercial Terms: Outline of the principal commercial terms under discussion (usually non-binding)

7. Confidentiality: Binding provisions regarding the treatment of confidential information exchanged during negotiations

8. Exclusivity: Terms regarding exclusive negotiations during an agreed period, if applicable

9. Duration and Termination: Period for which the preliminary agreement remains in effect and circumstances for termination

10. Costs and Expenses: Each party's responsibility for costs incurred during the negotiation process

11. Governing Law and Jurisdiction: Specification of applicable law (Australian) and jurisdiction for dispute resolution