Is an electronic signature valid?

Yes. Electronic signatures are legally valid under the federal ESIGN Act (15 U.S.C. ch. 96, 2000) and state UETA statutes; ensure intent, consent, attribution, and reliable record retention.

Do preliminary agreements need notarization?

Usually not for ordinary commercial terms, but notarization may be required where the agreement must be recorded (real property) or where a state-specific form requires it.

What if a signer lacks authority?

If the signer lacked authority, the agreement may be unenforceable until ratified by an authorized party; require title and authorization statements to reduce this risk.

How should I store executed copies?

Store final signed PDFs with audit trails in a secure repository and back them up; retain per regulation (IRS, HIPAA) and organizational policy.

Can terms be amended later?

Yes. Amendments should be written, signed by authorized parties, and reference the original preliminary agreement to avoid ambiguity.

When should I involve counsel?

Consult counsel for material obligations, exclusivity, complex IP, or when the agreement may have long-term legal or regulatory implications.

Electronic Signature
Templates
Miscellaneous
Preliminary Business Agreement

Preliminary Business Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

Preliminary Business Agreement

This Preliminary Business Agreement (the Agreement) is entered into as of Effective Date: by and between:

Client Name:

Service Provider Name:

RECITALS

WHEREAS, Client seeks to engage Service Provider to perform preliminary business planning, advisory, and related services described herein in order to evaluate and prepare for a potential commercial engagement; and

WHEREAS, Service Provider represents that it has the necessary experience, personnel, and capabilities to perform the preliminary services and to provide draft deliverables, analyses, and recommendations for Client's review; and

WHEREAS, the parties desire to set forth the principal terms governing the preliminary engagement, recognizing that a definitive services agreement may be negotiated subsequently.

SCOPE OF WORK

Description of Preliminary Services

PAYMENT TERMS

Client shall pay Provider the fees set forth below in consideration for the preliminary services described in this Agreement.

Total Preliminary Fee Payment Schedule Late Payment Charge

All amounts payable under this Agreement are exclusive of taxes, which shall be the responsibility of the party required by law to remit such taxes. Provider shall invoice Client in accordance with the Payment Schedule and Client shall pay invoices within the period set forth in the Payment Schedule.

TERM AND TERMINATION

The term of this Agreement shall commence on Start Date: and shall continue until End Date: unless earlier terminated in accordance with this section.

Either party may terminate this Agreement for convenience upon prior written notice to the other party given at least days prior to the effective date of termination.

Either party may terminate immediately for material breach by the other party if such breach remains uncured for a period of thirty (30) days after written notice specifying the breach. Upon termination, Client shall pay Provider for all services performed and expenses reasonably incurred through the effective date of termination.

CONFIDENTIALITY

Each party acknowledges that during the term of this Agreement it may receive confidential or proprietary information of the other party ("Confidential Information"). Each party agrees to hold Confidential Information in strict confidence, to use it solely for performance under this Agreement, and not to disclose it to any third party except as required by law or with the disclosing party's prior written consent. Confidential Information shall not include information that (i) is or becomes publicly available through no fault of the receiving party, (ii) is lawfully received from a third party without an obligation of confidentiality, or (iii) is developed independently without use of the disclosing party's Confidential Information.

Confidentiality Binding Acknowledgement

I acknowledge that the confidentiality obligations above apply to me and my organization.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction specified below without regard to conflict of law principles.

Governing Jurisdiction

LIMITATION OF LIABILITY

Except for liability arising from a party's gross negligence or willful misconduct, neither party shall be liable to the other for indirect, incidental, consequential, exemplary or punitive damages, or for loss of profits, loss of business, or loss of data, whether in contract, tort or otherwise. The aggregate liability of each party under this Agreement shall not exceed the total fees paid by Client to Provider under this Agreement.

ENTIRE AGREEMENT

This Agreement constitutes the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals, and communications, whether written or oral, relating to the preliminary services described herein. Any amendment or modification of this Agreement must be in writing and signed by authorized representatives of both parties.

MISCELLANEOUS

If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect. The parties are independent contractors; nothing in this Agreement creates an agency, partnership, or joint venture between them. Notices required under this Agreement shall be in writing and delivered to the addresses designated in writing by the parties.

Client:

By:

Date:

Service Provider:

By:

Date:

What a Preliminary Business Agreement Is

A Preliminary Business Agreement is a short-form contract that records initial terms between parties while they negotiate a full agreement. It usually captures the parties, scope, basic consideration, and key deadlines to preserve intent and outline next steps. This document is commonly used to hold an offer open, set preliminary delivery or payment terms, or document exclusivity while parties complete due diligence.

Why Use a Preliminary Business Agreement

A Preliminary Business Agreement creates a clear, time-limited framework that preserves bargaining positions and reduces misunderstandings; it can also make later performance obligations easier to enforce under ESIGN (15 U.S.C. ch. 96, 2000) and UETA (1999) when executed electronically.

Who Typically Prepares and Signs This Agreement

Companies and individuals use this document when they need a written record of initial terms before finalizing a full contract.

Startups and investors securing term commitments during due diligence.
Vendors and buyers documenting preliminary pricing, scope, or exclusivity.
Legal and procurement teams formalizing short-term obligations prior to full contract execution.

Use it when parties want a binding interim framework or a clear set of milestones while negotiating a definitive agreement.

Typical Signatory Roles

CEO/Founder

The primary authorized representative for small companies; signs to commit the business to the preliminary terms and to authorize negotiation and due diligence access.

Procurement Lead

Authorized signatory in larger organizations responsible for commercial terms, timelines, and coordinating internal approvals before executing definitive agreements.

Core Elements to Include in a Professional Agreement

A well-drafted Preliminary Business Agreement keeps language concise while covering the essentials that protect parties and enable clear next steps.

Parties

Full legal names and entity types for every party, including state of formation and business address to avoid ambiguity in enforcement.

Scope

A short, specific description of the goods, services, project, or transaction covered by the preliminary terms to prevent scope creep.

Consideration

A clear statement of payment, deposit, or other consideration, with amounts, due dates, and refund conditions where applicable.

Term and Deadlines

Effective date, expiration of the preliminary terms, and any milestone or contingency deadlines that trigger obligations.

Exclusivity

If present, define the exclusivity period, territory, and permitted activities for each party to avoid future disputes.

Next Steps

Reference the intended definitive agreement, required approvals, and a brief plan for completing negotiations or due diligence.

Step-by-Step: Completing the Preliminary Business Agreement

Follow these sequential steps to prepare, review, and execute the agreement with clarity and legal consistency.

01

Prepare Draft: Enter parties, scope, consideration, and key dates.
02

Review Terms: Have legal and finance review for risks and accuracy.
03

Select Signing Method: Choose in-person, remote notarization, or eSignature with authentication.
04

Execute and Distribute: Obtain signatures, save final PDF, and share executed copies.

How to Customize an Online Signing Workflow

Configure fields and authentication to match the document's sensitivity and the parties' compliance needs.

Field	Configuration
Signer Authentication	Email link, SMS code, or KBA as required
Conditional Fields	Show or hide clauses based on earlier answers
Template Use	Save standard preliminary agreements for reuse
Bulk Distribution	Bulk send for mass initial offers when applicable

Where to Send or File the Executed Agreement

Decide destinations for executed copies depending on the agreement purpose and recordkeeping obligations.

Internal Records: Company contract repository or ERP
Counterparty: Provide final signed PDF to all parties
Escrow/Agent: Deliver to escrow or closing agent when applicable
Public Filing: Record with county recorder only if real property involved

Technical Options for Digital Signing and Distribution

Choose a platform that supports required authentication and integrates with your systems.

Integrations: Salesforce, Microsoft 365, NetSuite
File Formats: PDF, Word DOCX, HTML
Authentication: Email, SMS, KBA, SSO options

Typical Timelines and Deadlines to Track

Document the critical dates to avoid missed obligations or termination rights; include cure periods and contingent deadlines explicitly.

Effective Date Entry:

Enter the agreed MM/DD/YYYY effective date

Negotiation Window:

Specify days to finalize definitive agreement

Deposit Due Date:

Set payment date and refund conditions

Financing Contingency:

State deadline for financing approval

Termination for Convenience:

Include notice period and cure timeframe

Key Milestones and Processing Stages

A simple milestone timeline helps parties monitor progress from initial terms to final contract execution.

01

Drafting

Prepare preliminary terms and distribute for comment.

02

Review

Legal and finance review, request revisions if needed.

03

Execution

All authorized signers sign; record timestamps and delivery.

04

Transition

Complete due diligence and execute definitive agreement.

Common Preparation Mistakes to Avoid

Using informal or vague consideration language that leaves material terms open to later dispute and undermines enforceability.
Omitting signatory authority or title, which can delay acceptance or require ratification by corporate officers.
Failing to set firm deadlines or cure periods, which allows one party to stall negotiations without consequence.
Neglecting to specify governing law and dispute resolution, leaving jurisdictional uncertainty for enforcement actions.

Consequences of an Incorrect or Incomplete Agreement

Unenforceability: Court may decline to enforce unclear terms

Lost Rights: Missed deadlines can extinguish claims

Contract Disputes: Ambiguity increases litigation risk

Regulatory Noncompliance: Privacy or financial rules may be violated

Financial Exposure: Deposits may become nonrefundable

Reputational Harm: Broken commitments can harm relations

Required Information and Supporting Details

Parties' Legal Names: Exact entity names

Contact Details: Address, email, phone

Scope Summary: Concise transaction description

Monetary Terms: Amounts and schedules

Key Dates: Effective and expiry dates

Signature Data: Signer name, title, date

Real-World Examples

Two practical examples show how organizations use preliminary agreements to preserve terms and speed negotiations.

Optica Ventures (COO)

A venture firm used a short preliminary agreement to record deal economics and exclusivity during diligence.

It preserved the offer while legal prepared the definitive SPA.
The approach reduced negotiation cycles and clarified expectations with portfolio companies during the funding window.

Martin Properties (Founder)

A property manager used a preliminary agreement to secure a tenant while final lease terms were drafted.

The tenant paid a holding deposit with a 30-day deadline.
This prevented parallel offers, documented key deliverables, and enabled an orderly final lease execution without in-person signing delays.

eSignature Provider Comparison for Executing Preliminary Agreements

This comparison highlights common plan features and pricing models; signNow is listed first per table conventions and competitive data below.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies	Varies	Varies	Varies
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies	Varies	Varies

Practical Tips for Accurate, Efficient Completion

Adopt consistent processes and clear templates to reduce rework and legal exposure when using preliminary agreements.

Standardize Templates

Use a single vetted template for preliminary terms and update centrally to ensure consistent language and reduce negotiation time.

Limit Duration

Set a short, explicit expiry for preliminary obligations to encourage timely completion of definitive agreements.

Record Authority

Require signers to include title and authority clause to show capacity to bind the organization and avoid ratification issues.

Preserve Audit Trail

Retain signed PDFs with timestamps, signer IP, and authentication method to support enforceability and dispute resolution.

FAQs and Troubleshooting

Answers to common questions about preparation, signing, and legal validity of preliminary business agreements.

Need help? Contact support

Is an electronic signature valid?
Yes. Electronic signatures are legally valid under the federal ESIGN Act (15 U.S.C. ch. 96, 2000) and state UETA statutes; ensure intent, consent, attribution, and reliable record retention.
Do preliminary agreements need notarization?
Usually not for ordinary commercial terms, but notarization may be required where the agreement must be recorded (real property) or where a state-specific form requires it.
What if a signer lacks authority?
If the signer lacked authority, the agreement may be unenforceable until ratified by an authorized party; require title and authorization statements to reduce this risk.
How should I store executed copies?
Store final signed PDFs with audit trails in a secure repository and back them up; retain per regulation (IRS, HIPAA) and organizational policy.
Can terms be amended later?
Yes. Amendments should be written, signed by authorized parties, and reference the original preliminary agreement to avoid ambiguity.
When should I involve counsel?
Consult counsel for material obligations, exclusivity, complex IP, or when the agreement may have long-term legal or regulatory implications.

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