Agreement in Principle or Agreement in Principal: Which One is Correct?
When it comes to drafting legal documents or agreements, details matter. Even a small mistake or error in word usage can have significant consequences. One common mistake that often confuses people is the usage of the terms « agreement in principle » and « agreement in principal. » Both phrases can sound similar, but they have different meanings. As a professional, I aim to shed light on the correct usage of these terms.
Agreement in Principle
An agreement in principle (AIP) refers to a preliminary agreement between two parties that outlines the general terms and conditions of a future contract or arrangement. It is not a legally binding document, but rather a statement of intent, setting out the main principles that will become part of a formal agreement.
For instance, when you are applying for a mortgage, you may be asked to provide an AIP. This is a document that shows how much the lender is willing to lend you and under what conditions, based on a preliminary assessment of your creditworthiness and financial status. The AIP acts as proof that you are a serious buyer and can help speed up the process when you want to make an offer on a property.
Agreement in Principal
On the other hand, the term « agreement in principal » is grammatically incorrect. The word « principal » refers to the head or chief of an organization or a primary sum of money. It has nothing to do with the concept of an agreement, which is why « agreement in principal » does not make sense.
Unfortunately, it is a common mistake that many people make, even in legal documents. The correct term to use is « Agreement in Principle. »
How to Avoid Using the Wrong Term
To avoid falling into the trap of using the wrong term, especially in legal documents, remember to double-check the spelling of the term before submitting it. You can also use tools such as online dictionaries and grammar checkers to ensure that you are using the right word.
In conclusion, an agreement in principle is a preliminary agreement that outlines the general terms and conditions of a future contract, while an agreement in principal is an incorrect term. As a professional, I always ensure that I use the correct terms to avoid confusing readers or causing errors that could have serious consequences.