What is an agreement in principle?

Purchase
Sale

An agreement in principle is an agreement between two parties on the terms of a future contract.

When is it necessary to obtain an agreement in principle?

 

When buying a property, it can be a good idea to establish an agreement in principle between the seller and the buyer. This reassures both parties that they are willing to sell or buy the property on the date and at the price agreed.

 

It is also often necessary to obtain an agreement in principle from your financial institution. This document certifies that your financing institution wishes to proceed with your purchase and will finance the property for the amount agreed. However, this is only a moral commitment.

 

An agreement in principle has no legal value and will not protect either party in the event of retraction or cancellation.

By Charline Demange, July 28, 2022

Additional definitions

  • Sale
    General
    Forward sale

    A forward sale is a form of sale that takes effect at the end of the term defined between the seller, the buyer and the notary. It allows the different parties to have more time to organize a move or to end a lease for example.

    Read more
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