Document background
The Preliminary Purchase Agreement is a crucial document in Philippine business and commercial transactions, serving as a bridge between initial negotiations and the final purchase agreement. This document is typically used when parties have reached agreement on key terms but require time for due diligence, regulatory approvals, or financing arrangements before completing the transaction. It provides protection for both parties by documenting their commitments while allowing necessary investigations and preparations to proceed. Under Philippine law, particularly the Civil Code and relevant special laws, this agreement creates binding obligations while maintaining flexibility for the parties to address contingencies. The document is especially important in complex transactions where significant due diligence is required or where regulatory approvals must be obtained.
