The label of “agreement to agree” is often understood as the death knell of a contract claim. Often—but not always. Under New York law, a preliminary agreement that omits material terms can still impose an obligation to negotiate in good faith toward a complete agreement.

Preliminary agreements are common in letters of intent or term sheets that proceed complex transactions, like mergers, where parties want to ensure that their time and resources are not wasted on an uninterested counter-party.

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