A pre-agreement is a succinct agreement reached by the parties, but may not have all the terms of the contract or has been formally written or executed. For example, interim agreements are agreements, declarations of intent and declarations of intent. The preliminary contract (“contractto preliminare” is also called “compromesso” – link to guide) is a real contract requiring both parties to sign the final contract. The parties obtain final conditions and intend to make their agreement mandatory, provided that a “formal contract” with a broader or more precise form of the agreement is signed at a later date. Could you be legally bound by negotiations without a formal contract? What happens if an interim agreement stipulates that negotiations are “contractual”? In a recent case, which also involved allegations that a contract to sell a loan was entered into when there had been a language in accepting an offer that said it was “mutual enforcement of an acceptable agreement,” the New York Court of Appeals said in Stonehill Capital Management, LLC v. Bank of the West , 2016 NY Slip Op 08481 (December 20, 2016), reached the opposite conclusion obtained by the Court of Appeal of England. Admittedly, the facts were much more favourable for the party insisting on the existence of a binding contract, despite the apparently related status of the contract established by the offer to accept the correspondence. However, while the New York Court of Appeals recognizes that “if a party openly and reasonably signals that it should be bound only by a written agreement, the courts should not thwart this intention,” the Court of Appeal said: unlike a number of other European countries, England does not appear to recognize an obligation such as that recognized in New York with respect to a Type II pre-contract. In England (like many U.S. states), a Preliminary Type II contract would simply be an unenforceable agreement. On the other hand, England, like most U.S. states, seems to recognize as obligatory what many cases that apply New York law call a major Type I agreement – that is, a preliminary agreement that demonstrates the intention to be bound by the agreed terms that are in itself sufficient to enforce the agreement, although there are other conditions to be agreed upon.