A heads of agreement, also known as a letter of intent, is a non-binding document that outlines the key terms and conditions of a proposed transaction or deal between two parties. It serves as a framework for negotiations and helps both parties understand the basic terms of the proposed agreement.
When drafting a heads of agreement, it is important to ensure that it accurately reflects the intentions of both parties and sets out clear guidelines for the negotiation process. To help you get started, here is a sample heads of agreement that you can use as a template:
[Heading]
Heads of Agreement
[Insert the date]
[Insert the names and addresses of the parties]
[Insert the purpose or subject matter of the agreement]
1. Definitions
[Insert definitions of key terms used in the agreement]
2. Scope of agreement
[Insert a brief description of the scope and purpose of the agreement]
3. Stages of negotiation
[Insert a list of the key stages of the negotiation process and the timeline for each stage]
4. Key terms and conditions
[Insert a list of the key terms and conditions of the proposed agreement, including but not limited to:
– Purchase price or consideration
– Payment terms
– Timing of completion
– Conditions precedent to completion
– Warranties and representations
– Confidentiality
– Non-compete clauses
– Governing law and jurisdiction
– Termination provisions]
5. Exclusivity
[Insert a provision stating whether the parties have agreed to exclusivity during the negotiation period]
6. Costs
[Insert a provision stating who will be responsible for any costs incurred during the negotiation period]
7. Entire agreement
[Insert a provision stating that the heads of agreement represents the entire understanding between the parties and supersedes all prior negotiations and agreements]
8. Amendment
[Insert a provision stating how the agreement can be amended or modified]
9. Governing law and jurisdiction
[Insert a provision specifying the governing law and jurisdiction for any disputes arising under the agreement]
10. Execution
[Insert a provision specifying the signature requirements for the agreement]
This sample heads of agreement can be adapted to suit your specific needs and should be reviewed by legal counsel before use. By using a heads of agreement as a starting point for negotiations, you can ensure that both parties are on the same page and have a clear understanding of the key terms and conditions of the proposed transaction.