Pre Purchase Agreement for Hong Kong

Pre Purchase Agreement Template for Hong Kong

A comprehensive legal document governed by Hong Kong law that establishes the preliminary terms and conditions for a future purchase transaction. It outlines the key elements of the proposed purchase including price, payment terms, conditions precedent, and completion requirements. The agreement provides a legally binding framework that protects both parties' interests during the pre-purchase phase while allowing for due diligence and necessary approvals. Operating under Hong Kong's common law system, it incorporates both local statutory requirements and international commercial practices, making it suitable for both domestic and cross-border transactions.

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What is a Pre Purchase Agreement?

The Pre Purchase Agreement serves as a crucial preliminary contract in Hong Kong's commercial landscape, typically used when parties need to formalize their intention to enter into a purchase transaction while certain conditions or requirements are still pending. It is particularly valuable in situations requiring detailed due diligence, regulatory approvals, or securing of financing before the final purchase can be completed. The document, governed by Hong Kong law, creates legally binding obligations while providing flexibility for parties to address specific conditions precedent. It includes essential elements such as deposit arrangements, due diligence provisions, warranties, and completion mechanisms, reflecting both local legal requirements and international business practices. This type of agreement is commonly used in various sectors from real estate to corporate acquisitions, offering protection to both parties during the pre-completion phase.

What sections should be included in a Pre Purchase Agreement?

1. Parties: Identification and details of all parties involved in the agreement, including full legal names, registration numbers for companies, and addresses

2. Background: Context of the transaction, relationship between parties, and general purpose of the agreement

3. Definitions: Definitions and interpretations of key terms used throughout the agreement

4. Subject Matter: Detailed description of the goods/property/assets to be purchased

5. Purchase Price: Specified purchase price, payment structure, and payment terms

6. Deposit: Details of any deposit required, payment timing, and deposit handling terms

7. Conditions Precedent: Conditions that must be satisfied before the agreement becomes fully effective

8. Due Diligence: Terms regarding the buyer's right to conduct due diligence and related procedures

9. Completion: Details of the completion process, timing, and requirements

10. Representations and Warranties: Standard representations and warranties from both parties

11. Termination: Circumstances under which the agreement can be terminated and consequences

12. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and jurisdiction details

13. General Provisions: Standard boilerplate clauses including notices, entire agreement, and amendments

What sections are optional to include in a Pre Purchase Agreement?

1. Language: Clause specifying prevailing language when agreement is bilingual (English/Chinese) - include when dealing with mainland Chinese parties

2. Confidentiality: Detailed confidentiality obligations - include for sensitive commercial transactions

3. Force Majeure: Provisions for unforeseen circumstances preventing performance - include for long-term or high-value transactions

4. Assignment: Rights and restrictions regarding assignment of the agreement - include when assignment rights are important to either party

5. Broker/Agent Provisions: Terms relating to any intermediaries involved - include when brokers or agents are part of the transaction

6. Tax Provisions: Specific tax-related terms and responsibilities - include for high-value transactions or when tax implications are significant

7. Financing Conditions: Terms related to obtaining financing - include when purchase is subject to financing approval

8. Intellectual Property: IP-related terms - include when the purchase involves IP rights

What schedules should be included in a Pre Purchase Agreement?

1. Asset Schedule: Detailed description and specifications of the assets being purchased

2. Payment Schedule: Detailed breakdown of payment terms, installments, and timing

3. Due Diligence Requirements: List of required due diligence items and documentation

4. Form of Notice: Template for various notices required under the agreement

5. Completion Checklist: List of items required for completion

6. Warranty Schedule: Detailed warranties specific to the assets or property

7. Required Consents: List of third-party consents or regulatory approvals 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

Hong Kong

Publisher

Genie AI

Document Type

Sales Contract

Sector

Sales

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Manufacturing

Technology

Financial Services

Retail

Import/Export

Professional Services

Construction

Healthcare

Hospitality

Automotive

Telecommunications

Relevant Teams

Legal

Finance

Procurement

Commercial

Operations

Risk & Compliance

Business Development

Corporate Secretariat

Investment

Property Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Commercial Director

Procurement Manager

Legal Counsel

Contract Manager

Business Development Manager

Property Manager

Investment Manager

Corporate Secretary

Risk Manager

Compliance Officer

Operations Director

Managing 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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