Preliminary Sales Agreement for Malaysia

Preliminary Sales Agreement Template for Malaysia

A Preliminary Sales Agreement under Malaysian law serves as a binding interim agreement that outlines the essential terms and conditions for a proposed sale transaction. This document, governed by Malaysian contract law including the Contracts Act 1950, establishes the framework for the final sale while protecting both parties' interests during the preliminary phase. It typically includes key commercial terms, conditions precedent, due diligence requirements, and timelines for completing the final transaction, while incorporating necessary provisions for compliance with Malaysian regulatory requirements and business practices.

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What is a Preliminary Sales Agreement?

The Preliminary Sales Agreement is a crucial document in Malaysian commercial practice, used when parties have reached initial agreement on key terms of a sale but need time to finalize details, conduct due diligence, or obtain necessary approvals before executing the final sale agreement. This document, while preliminary in nature, creates legally binding obligations under Malaysian law and typically includes essential elements such as subject matter description, purchase price, payment terms, conditions precedent, and timelines. It serves various industries and transaction types, from simple asset sales to complex corporate transactions, and must comply with Malaysian legal requirements including the Contracts Act 1950, Stamp Act 1949, and relevant sector-specific regulations. The agreement provides protection for both parties during the interim period while they work towards completing the final transaction.

What sections should be included in a Preliminary Sales Agreement?

1. Parties: Identification and details of the seller and buyer, including registration numbers for companies or ID numbers for individuals

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

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

4. Subject Matter: Clear description of the goods or property being sold

5. Purchase Price: The agreed price and payment terms, including any deposits or installments

6. Timeline: Key dates including signing, payment schedules, and completion

7. Conditions Precedent: Conditions that must be fulfilled before proceeding to the final sale agreement

8. Representations and Warranties: Basic warranties about the subject matter and parties' capacity to enter into the agreement

9. Due Diligence: Process and timeline for buyer's investigation of the subject matter

10. Confidentiality: Obligations regarding confidential information exchanged during the preliminary phase

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

12. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction for disputes

What sections are optional to include in a Preliminary Sales Agreement?

1. Regulatory Approvals: Required when the sale is subject to specific regulatory requirements or governmental approvals

2. Intellectual Property: Needed when the sale involves transfer of IP rights or licensing

3. Environmental Compliance: Required for sales involving property or businesses with environmental implications

4. Employee Matters: Relevant when the sale involves transfer of employees or employment-related considerations

5. Tax Provisions: Detailed tax considerations and allocations when significant tax implications exist

6. Force Majeure: Provisions for unforeseen circumstances, particularly relevant in long-term preliminary agreements

7. Anti-corruption Compliance: Required for high-value transactions or when dealing with government-linked entities

What schedules should be included in a Preliminary Sales Agreement?

1. Schedule 1 - Description of Subject Matter: Detailed specifications of the goods, property, or business being sold

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

3. Schedule 3 - Due Diligence Checklist: List of documents and information to be provided for due diligence

4. Schedule 4 - Timeline and Key Dates: Detailed timeline of all key dates and deadlines

5. Schedule 5 - Form of Final Sale Agreement: Draft or key terms of the final sale agreement to be entered into

6. Appendix A - Required Documents: List of documents required from each party for completion

7. Appendix B - Compliance Requirements: Specific regulatory or legal compliance requirements to be met

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

Malaysia

Publisher

Genie AI

Document Type

Sale Agreement

Cost

Free to use
Relevant legal definitions
Relevant Industries

Real Estate

Manufacturing

Retail

Technology

Agriculture

Construction

Automotive

Consumer Goods

Industrial Equipment

Healthcare

Education

Professional Services

Energy

Mining

Telecommunications

Relevant Teams

Legal

Commercial

Sales

Procurement

Finance

Operations

Business Development

Risk Management

Compliance

Corporate Secretarial

Executive Management

Relevant Roles

Chief Executive Officer

Managing Director

Commercial Director

Legal Counsel

Contract Manager

Business Development Manager

Sales Director

Procurement Manager

Company Secretary

Finance Director

Operations Manager

Project Manager

Risk Manager

Compliance Officer

General Manager

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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