What is it called when parties agree to certain terms before finalizing a contract?

When parties agree to certain terms before finalizing a contract, this process is known as negotiation. Negotiation involves discussions between the involved parties to reach mutual understanding and agreement on various aspects of the contract, such as price, terms of service, and deadlines. This phase is crucial as it allows both parties to clarify their needs, address potential concerns, and modify terms to ensure that the contract reflects their interests and intentions.

During negotiation, parties often engage in give-and-take discussions, which may involve making offers, counteroffers, and adjustments until a satisfactory consensus is reached. This dynamic process can also help prevent disputes later on by ensuring that all parties have clearly outlined and agreed upon their responsibilities and expectations before the contract is formally signed.

In contrast, other concepts like prevention, consent, and compromise address different aspects of agreement and contract formation. Prevention relates to avoiding certain actions or outcomes, consent refers to the mutual agreement to the terms, often solidifying the contract after negotiation, and compromise indicates a reduction in demands from one or both parties to reach a final agreement. However, none of these concepts encapsulate the entire process of agreeing to terms, which is the essence of negotiation.