Agreement Does Not Mean the Deal Is Complete

Agreement Does Not Always Mean the Deal Is Complete

In some deals, the parties successfully agree on the price, obligations and payments, and sign a document that appears to mean everything is over.

But the reality is that signing may be the beginning of the process, not its end.

Official approval, satisfaction of a condition precedent, transfer of a right, completion of a document or a step beyond the unilateral control of any party may still remain.

This is where one of the most precise areas of contractual drafting emerges:

What happens between the moment of agreement and the moment of completion?

Who bears the risks?
When do payments become due?
What if some conditions are satisfied and others cannot be satisfied?
And when does withdrawal constitute a breach, and when is it simply the failure of an unmet condition?

This transitional stage may be more important than the agreement itself, because it determines who bears the consequences of what remains incomplete.

For this reason, in complex deals, it is not enough to define what the parties have agreed.

It is also necessary to define precisely when that agreement becomes complete, and what happens if it never reaches that point.

A good deal does not merely regulate how it begins… it also knows how to respond if it remains suspended between agreement and completion.

— Omar Al-Baghdadi