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You’ve been negotiating with the other side and have finally nailed down most of the terms. You want to memorialize those terms in a preliminary agreement or memorandum of understanding, but make everything subject to a final written formal document in case you still can’t agree on the final terms. Is an express reservation that the agreement is not final until formalized and executed sufficient to protect you and your company? The answer may depend upon the jurisdiction whose law applies. At the very least, you may have an obligation to continue to attempt to finalize the agreement in good faith. Therefore, it is important to check applicable law before memorializing a preliminary agreement to avoid unintended obligations. 

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