Agreement to Agree Examples

Agreement to Agree Examples: A Guide to Common Contract Language

Contracts are a cornerstone of business dealings, but sometimes the language used within them can be confusing. One such example is the use of “agreement to agree” language. This type of language is often found in contracts that require parties to reach a future agreement on a specific topic. Here are some common examples of this type of language and how it can impact contractual obligations.

Example 1: Memorandum of Understanding (MOU)

An MOU is a type of agreement that outlines the terms and understanding of a future business relationship. It is often used for joint ventures, partnerships, or other collaborative endeavors. An MOU may include language that states “the parties agree to negotiate in good faith to reach a definitive agreement on X topic within Y timeframe.”

In this example, the agreement to agree language indicates that the parties have not yet reached a definitive agreement on the topic outlined in the MOU. Instead, they have agreed to negotiate in good faith to reach an agreement within a specific timeframe. The failure to reach an agreement within the timeframe could result in a breach of the MOU.

Example 2: Pre-Contractual Agreements

Pre-contractual agreements are agreements made before a formal contract is signed. These agreements may include language that states “the parties agree to negotiate in good faith to enter into a formal agreement on X topic.”

Similar to the MOU example, the language used in a pre-contractual agreement indicates that the parties have not yet reached a definitive agreement on the topic outlined in the agreement. They have only agreed to negotiate in good faith to reach a formal agreement. The failure to reach a formal agreement could result in the pre-contractual agreement being terminated.

Example 3: Renewal Clauses

Renewal clauses are commonly found in contracts that have a set term. The clause may include language that states “the parties agree to negotiate in good faith to renew this contract for an additional term on the same or similar terms.”

In this example, the agreement to agree language indicates that the parties have not yet reached an agreement on the renewal of the contract. Instead, they have agreed to negotiate in good faith to reach an agreement on the same or similar terms. The failure to reach an agreement could result in the contract expiring at the end of the initial term.

Conclusion

Agreement to agree language is a common feature of various types of contracts. It is important to understand that this language does not create a definitive agreement on the topic outlined in the contract. Instead, it creates an obligation to negotiate in good faith to reach a definitive agreement within a specific timeframe. Failure to reach an agreement could result in a breach of the contract or termination of the agreement. As a copy editor, it is important to ensure that this type of language is clear and understandable to all parties involved in the contract.