Legal Definitions - agreement to agree

An agreement to agree is a type of agreement that is not enforceable because it does not contain all the necessary details. It is an agreement that purports to bind two parties to negotiate and enter into a contract. There are two types of agreement to agree:

1. An unenforceable agreement that is negotiated with the intent that the final agreement will be embodied in a formal written document and that neither party will be bound until the final agreement is executed.
2. A fully enforceable agreement containing terms that are sufficiently definite as well as adequate consideration, but leaving some details to be worked out by the parties.

For example, if two parties agree to negotiate the terms of a contract and sign a formal agreement later, it is an unenforceable agreement to agree. However, if the parties agree on the essential terms of the contract, such as the price and the quantity, and leave some details to be worked out later, it is a fully enforceable agreement to agree.

Another example of an agreement to agree is a letter of intent. A letter of intent is a document that outlines the preliminary understanding between two parties who intend to enter into a contract. It is not a binding contract, but it sets out the basic terms of the agreement and serves as a starting point for negotiations.