In the preliminary agreement the parties undertake to enter into another contract in the future. Preliminary contract may precede the conclusion of various agreements the most often used to arrange the sale of real estate.
Typically a preliminary contract is concluded when the parties need a longer time period to be bound by the final, for security in the civil turnover and legal reality.
Because of an explicit legal prohibition or because of their specific features, the conclusion of certain contracts may be agreed by preliminary contract – these are real, grants, interim agreements and those concluded with a view of individual parties. The preliminary contract must meet the general requirements, unless these preliminary contract must contain provisions concerning the the essential terms of final contract.
The purpose of the particular requirement is preliminary contract to include enough specific data on intention of the parties to the parameters of the forthcoming relationship which to enabling the court to declare the decision to replace the final contract. Furthermore, stipulations regarding the essential terms of the final contract a preliminary contract, being preparatory to the promise final agreement on the need to include provisions on its conclusion – for example, within which should be concluded, obligations of the parties in preparation (gathering the necessary documents, removal of existing barriers) and others.
The preliminary agreement is generally informal, with the exception of cases in which it agreed with the conclusion of a contract that requires a notary or a notarized form – then the written form is a requirement for the validity of the preliminary contract. So the format for the preliminary contract depends on its intended final contract form of validity.
Although the law does not place the written form as a condition for the validity of the preliminary contracts are agreed with the conclusion of a contract which does not require a notary or a notarized form, it appears necessary because of its special preparatory function. The opportunity to ask preliminary contract to be declared final by the court imposes the need for clarity on the parties agreed parameters of forthcoming contracts. The oral form of the preliminary agreement would require the demonstration of reservations made on the essential terms of the final contract to rely on witness evidence because these arrangements will need to be reproduced in the judgment. Besides the risk of inaccurate reproduction of the preliminary contract clauses witness statements may be inadmissible and thus make it impossible to determine the content of the preliminary agreement by the court.
By its legal nature preliminary contract is an agreement whereby the parties agree on essential terms of the other final contract whose conclusion must follow a certain period, the occurrence of certain circumstances or conditions.
From the definition of the preliminary contract is that it is a bond and bilateral – each of the parties involved are required to conclude a final agreement in the future and the right to require the same from the other side.
With the preliminary contract is created a mutual obligation to take out another contract – final.
The preliminary agreement which agreed the sale of an asset doesn’t have a proprietary effect – it does not transfer ownership or limited real rights on it but an obligation for parties to sign a final contract of sale. Moreover – upon signing the preliminary contract of sale need not party shall transfer any right to the owner. In these cases, the preliminary agreement, it undertakes to acquire this right, then forward it to the other side. However, possession, surrendered on the basis of the preliminary contract shall enjoy enhanced legal protection. Without a bona fide possessor acquired possession on the basis of preliminary contract shall enjoy the rights namely:
– Is entitled to the enjoyment of the property and obtain yields that it has given to bringing an action for its return;
– Can ask for the improvements made??, the amount by which the increased value of the property as a result of these improvements
– May request to be paid for the necessary expenditures made ??for the preservation of the property;
– Has the right to hold property until payment of the improvements and the costs.