Document background
The Preliminary Partnership Agreement is essential in South African business practice when parties intend to form a partnership but need to establish initial terms while conducting due diligence or finalizing detailed arrangements. This document serves as a bridging agreement, protecting all parties' interests during negotiations while working toward a final partnership structure. It typically includes provisions for confidentiality, exclusivity, cost allocation, and good faith negotiations, all aligned with South African common law principles governing partnerships. The agreement is particularly valuable when complex partnerships are being formed, when significant due diligence is required, or when parties need time to finalize detailed operational and financial arrangements while maintaining legal protection during the preliminary phase.
