Preliminary Agreement Template for Nigeria

A Preliminary Agreement sets out the basic terms two parties plan to follow before signing their final contract. Think of it as a roadmap that outlines key points like price, timeline, and core obligations while both sides work out the details. Under Nigerian contract law, these agreements can be legally binding if they include essential elements and show clear intention to create legal relations.

Common in Nigerian real estate, oil and gas ventures, and major business deals, these documents protect both parties during negotiations. They help prevent misunderstandings and keep discussions on track, especially for complex transactions that need time to finalize. While not every detail needs to be settled, the main commercial terms should be clear enough to guide the path to a final agreement.

Use a Preliminary Agreement when entering complex negotiations that need time to finalize, especially in Nigerian business sectors like oil and gas, real estate development, or major corporate acquisitions. This document becomes crucial when dealing with high-value transactions where parties need to lock in basic terms while working out intricate details.

It proves particularly valuable when protecting sensitive information during due diligence, securing exclusivity periods, or establishing clear negotiation frameworks. Many Nigerian businesses rely on these agreements during joint venture formations, when coordinating with multiple stakeholders, or in situations requiring significant regulatory approvals before final completion.

• Non-Binding Letters of Intent: Outline basic deal terms without legal obligations, commonly used in Nigerian property transactions and corporate acquisitions
• Binding Term Sheets: Create enforceable commitments on key points while leaving room for detailed negotiations, popular in oil and gas partnerships
• Memoranda of Understanding: Balance flexibility with partial enforceability, often used in government contracts and infrastructure projects
• Heads of Agreement: Combine binding and non-binding elements, frequently seen in joint ventures and major commercial deals
• Exclusivity Agreements: Focus on securing negotiation rights while finalizing main terms, common in Nigerian merger discussions

• Corporate Legal Teams: Draft and review Preliminary Agreements to protect company interests during major business negotiations
• Private Law Firms: Advise clients on terms, prepare customized agreements, and ensure compliance with Nigerian law
• Business Executives: Review and sign these agreements during mergers, acquisitions, or joint ventures
• Investment Banks: Use them to structure deals and outline financial terms for large transactions
• Government Agencies: Enter into these agreements for public-private partnerships and infrastructure projects
• Industry Regulators: Monitor compliance and enforce terms when disputes arise in regulated sectors

• Basic Deal Terms: Gather key commercial points including price, timeline, and main obligations from all parties
• Party Information: Collect accurate legal names, registration numbers, and authorized signatories of all involved entities
• Scope Definition: Outline clear boundaries of what the agreement covers and excludes
• Regulatory Requirements: Check relevant Nigerian industry regulations and required approvals
• Confidentiality Needs: Identify sensitive information requiring protection during negotiations
• Exit Strategy: Define conditions for termination and consequences of withdrawal
• Document Generation: Use our platform to create a legally-sound agreement incorporating all essential elements

• Identification Section: Full legal names and addresses of all parties, including registration details
• Purpose Clause: Clear statement of intent and scope of the proposed transaction
• Key Terms: Essential commercial points like price, payment terms, and timeline
• Binding Status: Explicit declaration of which provisions are legally binding
• Confidentiality Terms: Protection of sensitive information exchanged during negotiations
• Duration Clause: Specific timeframe for negotiations and agreement validity
• Governing Law: Clear statement choosing Nigerian law as governing authority
• Signature Block: Space for authorized representatives' signatures and dates

A Preliminary Agreement differs significantly from a Business Acquisition Agreement in several key aspects under Nigerian law. While both documents play roles in corporate transactions, their timing, scope, and legal effects vary considerably.

• Legal Binding Effect: Preliminary Agreements often contain both binding and non-binding elements, while Business Acquisition Agreements are fully binding contracts
• Timing and Purpose: Preliminary Agreements initiate negotiations and outline basic terms, while Business Acquisition Agreements finalize the detailed terms of the purchase
• Level of Detail: Preliminary Agreements cover core commercial points broadly, whereas Business Acquisition Agreement includes comprehensive terms, warranties, and specific obligations
• Flexibility: Preliminary Agreements allow room for negotiation and adjustment, while Business Acquisition Agreements lock in final terms with limited scope for changes
• Due Diligence: Preliminary Agreements often facilitate the due diligence process, while Business Acquisition Agreements reflect findings from completed due diligence