Side agreements are contractual agreements that are often made in conjunction with a larger agreement or contract. They are also sometimes referred to as “side letters” or “side deals”. These agreements can be complex in nature and are often used to address specific issues that are not covered in the main agreement. In this article, we will explore the definition of side agreements and their importance in business.
A side agreement is a separate and distinct agreement that is made between two parties in addition to a main agreement. Side agreements are often used to cover issues that are not included in the main agreement or to modify certain aspects of the main agreement. Common examples of side agreements include non-disclosure agreements, confidentiality agreements, and settlement agreements.
Side agreements can serve several important purposes. For example, they can be used to address specific issues that are not covered in the main agreement, such as intellectual property rights or licensing agreements. They can also be used to modify specific aspects of the main agreement, such as the price or payment terms.
Side agreements are particularly important in complex business transactions, such as mergers and acquisitions. In such transactions, there may be many different issues that need to be addressed, and a main agreement may not cover all of them. Side agreements can be used to address these issues in a way that is specific to the transaction at hand.
One important aspect of side agreements is that they must be consistent with the main agreement. In other words, they cannot contradict or undermine the terms of the main agreement. If a side agreement conflicts with the main agreement, it may be unenforceable.
Another important aspect of side agreements is that they must be properly documented and executed. This means that they should be in writing and signed by both parties. This helps to ensure that there is a clear record of the agreement and its terms.
In conclusion, side agreements are an important tool for businesses when negotiating complex transactions. They allow parties to address specific issues that may not be covered in the main agreement and to modify certain aspects of the main agreement. However, it is important that side agreements are consistent with the main agreement and properly documented and executed. As a professional, it is important to understand the definition of side agreements and their importance in business transactions.