Negotiating a contract is a challenging and complex task. One must take into account a multitude of factors to successfully negotiate a contract. Oftentimes, a final contract concludes after the parties reach what is known as an agreement in principle. Understanding an agreement in principle is fundamental to an overall understanding of contracts.
Function
The function of an agreement in principle is to establish the primary elements of a contract between the parties.
Effects
The effects of an agreement in principle is to outline the parameters of the final agreement.
Time Frame
There is no standard time frame between the development of an agreement in principle and the signing of a final contract.
Considerations
A wise course is to put the basic elements of the agreement in principle into written form.
Warning
Because of the complex nature of contract negotiations, obtaining legal representation is a wise course of action.