Heads of terms for commercial transactions

by Practical Law Commercial

A standard document that provides heads of terms for a general commercial transaction between two UK companies. The document sets out the principal terms of a proposed deal before the parties reach the more formal contract stage. It is partially legally binding. The key commercial terms are not binding, which allows for flexible negotiation. However, it includes several legally enforceable clauses to protect the parties during the pre-contract stage. These binding provisions address matters, such as confidentiality, costs, and non-solicitation of customers and employees. The terms also include an exclusivity or lock-out clause to prevent negotiations with third parties for a set period. It also establishes that the governing law and jurisdiction is that of England and Wales, providing a secure framework for negotiations.