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Intent To Purchase Agreement for Saudi Arabia

Intent To Purchase Agreement Template for Saudi Arabia

A preliminary agreement governed by Saudi Arabian law that outlines a party's intention to purchase specific assets, shares, or a business, while setting forth the basic terms and conditions for the proposed transaction. This document establishes the framework for due diligence and subsequent negotiations, incorporating both Shariah principles and Saudi commercial law requirements. It typically includes provisions for exclusivity, confidentiality, and good faith negotiations, while ensuring compliance with local regulatory requirements and cultural considerations.

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What is a Intent To Purchase Agreement?

The Intent To Purchase Agreement serves as a crucial preliminary document in Saudi Arabian business transactions, establishing the framework for potential acquisition of assets, shares, or entire businesses. It is commonly used when parties have reached initial understanding but require formal structure for due diligence and detailed negotiations. The document must comply with both Shariah principles and Saudi commercial regulations, often requiring both Arabic and English versions. While not typically binding regarding the final purchase, it creates legally enforceable obligations regarding exclusivity, confidentiality, and negotiation conduct. This agreement is particularly important in the Saudi context where business relationships and formal documentation of intentions play a significant role in commercial dealings. It helps parties establish clear parameters while maintaining flexibility for detailed terms in the final purchase agreement.

What sections should be included in a Intent To Purchase Agreement?

1. Parties: Identification of all parties to the agreement, including full legal names, addresses, and commercial registration details as per Saudi requirements

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

3. Definitions: Key terms used throughout the agreement, including Arabic translations where necessary

4. Subject Matter of Purchase: Detailed description of the asset or business intended to be purchased

5. Purchase Price and Payment Terms: Proposed price and basic payment structure, subject to due diligence and final agreement

6. Due Diligence: Framework for conducting investigation of the target asset/business

7. Timeline: Key dates and deadlines for due diligence, negotiations, and execution of final agreement

8. Exclusivity: Terms preventing seller from negotiating with other parties during the specified period

9. Confidentiality: Obligations regarding non-disclosure of information exchanged during negotiations

10. Good Faith Negotiations: Commitment to negotiate in good faith, incorporating Islamic principles of fair dealing

11. Governing Law and Jurisdiction: Specification of Saudi law as governing law and relevant court jurisdiction

12. Language: Specification of controlling language version (Arabic/English) as per Saudi requirements

13. Execution: Signature blocks and execution requirements compliant with Saudi law

What sections are optional to include in a Intent To Purchase Agreement?

1. Shariah Compliance: Specific provisions ensuring compliance with Islamic principles, used when explicitly required or when dealing with Islamic financial institutions

2. Regulatory Approvals: Requirements for obtaining governmental or regulatory approvals, included when transaction involves regulated sectors

3. Foreign Investment Provisions: Special provisions required when one party is a foreign entity, addressing SAGIA requirements

4. Break Fee: Provisions for compensation if deal doesn't proceed, ensuring Shariah-compliant structure

5. Financing: Basic terms of proposed financing structure, included when purchase requires external financing

6. Employee Matters: Preliminary agreements regarding employees, used in business purchase scenarios

7. Intellectual Property: Preliminary terms regarding IP transfer and protection, used when IP is a significant component

8. Real Estate Matters: Special provisions for real estate transactions, including municipality requirements

What schedules should be included in a Intent To Purchase Agreement?

1. Schedule 1 - Asset Description: Detailed description of assets or business to be purchased

2. Schedule 2 - Initial Due Diligence Requirements: List of documents and information required for due diligence

3. Schedule 3 - Timeline: Detailed timeline with specific milestones and deadlines

4. Schedule 4 - Preliminary Terms: Key commercial terms agreed in principle

5. Appendix A - Required Approvals: List of regulatory and governmental approvals required

6. Appendix B - Form of Confidentiality Agreement: Template of detailed confidentiality agreement if required

7. Appendix C - Corporate Authorities: Evidence of corporate authority to enter into the agreement

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

Saudi Arabia

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions

































Clauses
































Relevant Industries

Real Estate

Manufacturing

Technology

Healthcare

Retail

Energy

Financial Services

Construction

Hospitality

Transportation

Education

Mining

Agriculture

Telecommunications

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Business Development

Strategy

Operations

Compliance

Risk Management

Executive Leadership

Relevant Roles

Chief Executive Officer

Managing Director

Chief Financial Officer

General Counsel

Legal Director

Business Development Manager

Investment Manager

Corporate Development Director

Mergers & Acquisitions Director

Finance Manager

Commercial Director

Strategy Director

Board Member

Company Secretary

Operations 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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