In law, an agreement in principle is a
stepping stone to a
contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
. Such agreements with regard to the principle are usually considered fair and equitable. Even if not all details are known, an ''agreement in principle'' may, for example, outline a schedule of
royalties
A royalty payment is a payment made by one party to another that owns a particular asset, for the right to ongoing use of that asset. Royalties are typically agreed upon as a percentage of gross or net revenues derived from the use of an asset o ...
.
References
Legal terminology
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