Binding Agreement Language

Many lawyers are probably a little too cautious when it comes to writing intent notes and term sheets. It is not uncommon for them to repeat the non-binding nature of an agreement in any provision contained in the agreement in question. This makes the whole document quite difficult to read. Below are two classic examples of language choice clauses: although this letter is not binding, it must serve as a basis for the negotiation of a final written agreement containing essential conditions that are not mentioned in this letter. This letter does not create an exclusive right to negotiate or an obligation to negotiate in good faith. Either party may, at any time, terminate the negotiations at its discretion. Partial compliance with the terms of this letter by either party or efforts by either party to demonstrate the intention of either party to be bound by the terms of this letter shall not be considered evidence. The approval or confirmation of an agreement by e-mail, text or other electronic communications service does not bind either party. The parties are not bound by an agreement unless they review, authorize, execute and provide a final written agreement.

Laws have been adopted authorizing the electronic execution of written agreements. Today, e-signature services such as DocuSign are often used to execute and deliver documents, but note that an email that states your consent can also create a binding contract. To avoid the accidental creation of a binding contract, repeat in your emails that an agreement will only be reached when a final written agreement is executed by the parties. It should be noted that the inclusion of the commitment clause in most contracts is not necessary. Indeed, the inclusion of such a clause is a great example of how contracts are inflated and how they can be maintained when documents are copied, inserted and reused. The reason for this is simple: if you expect to appear before a Chinese (or foreign) court, the staff of that court will not speak English. You won`t read English….