2. In general, any contract or agreement concluded previously, in particular one which excludes the conclusion of another similar contract. We have noticed that a number of major South African banks are now gobbling up documents called “grant estimates”, “mortgage offers” and some other documents for which banks provisionally approve a loan to be secured by registering mortgage paper on a property under a number of conditions. We believe banks are likely to add this step to reduce funding costs when funds are allocated and set aside for financing approved loans. These approvals expressly stipulate that this approval is not a statement or offer prior to the agreement (within the meaning of the National Credit Act) and that, therefore, these approvals are not taken into account with respect to standard sales contracts that would normally be concluded to satisfy the condition preceding the condition precedent relating to the grant of an obligation. The offer shows the total cost of your loan agreement. An opening statement, on the other hand, describes the conditions. So how can a company ensure that its preconstraitual document does not inadvertently establish a legal relationship? Before you sign a loan agreement, you need to understand what you are accepting. If you don`t, you could be in financial trouble.
Ask the credit provider to explain the offer if you don`t understand it. They were released for credit! The next step is to carefully read the documents that describe your agreement. The risk of not addressing this stage/approval contractually is that the condition precedent is not considered to be met. If, after receiving such basic approval, the Buyer does not advance the financing by the Bank or does not thwart the obtaining of such financing by not providing the Bank with the necessary documents as desired, the condition precedent will not be fulfilled and the agreement will be lost. We recommend that you include the following clause in your purchase agreement to provide security to the parties and fill this gap: To understand the agreement and ensure that the credit provider also complies with the National Credit Act, you should ask yourself the following questions when reading the document: The loan agreement states, among other things, your responsibilities to the credit provider. The following information should be included in the loan agreement and explained to you: Read the pre-contract statement carefully and offer yourself and make sure you can answer these questions: Finally, and on a more commercial note, if a carefully prepared preconseçal document does not create legally binding obligations, there is always a practical risk that this may be difficult after signing, practically or morally to renegotiate terms if a problem arises during the final contract negotiations that may not have been taken into account from the beginning. 2To conclude (an agreement, etc.) by contract in advance. Even without purpose: to conclude a contract beforehand; to organize, organize or buy in advance. Read carefully the documents that describe your agreement.