An agreement between a buyer and seller of land involving a written statement of intent (subject to contract and whether or not a fee is paid) to buy and sell a property.
A reservation agreement is frequently used in the sale of new homes when a buyer reserves the right to buy the property for a period of time (the reservation period) and pays a fee. The builder or developer states that it will not sell the property to another during the reservation period. If the buyer decides to buy the property, any fee is deducted from the deposit paid on exchange of contracts. If the buyer decides not to proceed with the purchase, it can cancel the reservation agreement at any time during the reservation period and the developer or builder usually reimburses the reservation fee after deduction of expenses (usually legal and administrative expenses).
Reservation agreements are not the same thing as exclusivity agreements (commonly called "lock-in" or lock-out agreements ).