Heads of terms set out the intentions between two businesses to create an agreement, providing a basis for future binding contractual terms. It can be drafted as a letter between two businesses known as a letter of intent, rather than a contract. However, the effect of these two documents is the same.
Record proposed terms during negotiations between two parties using this heads of terms agreement template. Heads of terms are not usually legally binding agreements but are useful when recording what is to be included in a proposed agreement and what is not. This heads of agreement has the option to include legally binding obligations of confidentiality, exclusivity and non-solicitation.
Heads of terms can be viewed as an agreement in principle, creating a framework for contractual agreement and adding instructions.