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Pre Contract Agreement for Germany

Pre Contract Agreement Template for Germany

This document is a Pre-Contract Agreement governed by German law, designed to establish the framework for formal negotiations between parties considering a significant business transaction. It incorporates key provisions required under German civil law (BGB), including obligations for good faith negotiations (Treu und Glauben), confidentiality requirements, and pre-contractual liability considerations. The agreement sets out the scope of negotiations, protects confidential information, allocates costs and expenses, and establishes clear parameters for the negotiation process while ensuring compliance with German legal requirements regarding form and pre-contractual duties.

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What is a Pre Contract Agreement?

Pre-Contract Agreements are essential documents in German business transactions where parties need to establish a formal framework for negotiations before entering into a definitive agreement. This document is particularly important under German law due to the specific legal principles of culpa in contrahendo and Treu und Glauben (good faith), which create pre-contractual obligations and potential liability. The agreement typically precedes major transactions such as mergers, acquisitions, joint ventures, or significant commercial contracts, providing protection for confidential information, establishing negotiation parameters, and allocating costs and responsibilities during the negotiation phase. It ensures compliance with German legal requirements while facilitating efficient and structured negotiations between the parties.

What sections should be included in a Pre Contract Agreement?

1. Parties: Identification and details of the contracting parties, including legal form of entities under German law

2. Background: Context of the proposed transaction and purpose of entering into pre-contractual negotiations

3. Definitions: Key terms used throughout the agreement, including German legal terminology where relevant

4. Scope of Negotiations: Clear description of what is being negotiated and the intended timeline

5. Confidentiality Obligations: Provisions regarding confidential information handling and non-disclosure obligations

6. Good Faith Negotiations: Commitment to negotiate in good faith (Treu und Glauben) as required under German law

7. Costs and Expenses: How costs during the negotiation period will be borne by the parties

8. Duration and Termination: Period of negotiations and circumstances under which parties can terminate discussions

9. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction for disputes

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

1. Exclusivity: Used when parties agree not to negotiate with other parties during a specified period

2. Break Fee: Include when parties agree on compensation if negotiations are terminated under specific circumstances

3. Interim Obligations: Necessary when parties need to undertake specific actions during the negotiation period

4. Due Diligence Process: Include when the pre-contract involves detailed investigation of business or assets

5. Press Releases and Announcements: Required for high-profile transactions or where public communications need control

6. Data Protection: Additional GDPR compliance section when personal data processing is involved

7. Assignment: Include when transfer of rights under the pre-contract agreement needs to be addressed

What schedules should be included in a Pre Contract Agreement?

1. Timeline: Detailed schedule of negotiation steps and milestones

2. Confidential Information: Specific list of what constitutes confidential information

3. Authorized Representatives: List of individuals authorized to conduct negotiations

4. Due Diligence Requirements: Detailed requirements and process for due diligence if applicable

5. Form of Non-Disclosure Agreement: Template NDA if separate from main agreement

6. Term Sheet: Key commercial terms under discussion

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions






























Clauses




























Relevant Industries

Manufacturing

Technology

Real Estate

Financial Services

Healthcare

Energy

Automotive

Telecommunications

Professional Services

Construction

Retail

Life Sciences

Infrastructure

Media and Entertainment

Relevant Teams

Legal

Corporate Development

Mergers & Acquisitions

Finance

Business Development

Executive Leadership

Risk & Compliance

Commercial

Strategy

Corporate Secretariat

Relevant Roles

Chief Executive Officer

Chief Legal Officer

General Counsel

Legal Director

Corporate Lawyer

Business Development Director

Chief Financial Officer

Investment Manager

Merger & Acquisition Manager

Commercial Director

Contract Manager

Risk Manager

Compliance Officer

Transaction Manager

Corporate Secretary

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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