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Heads of Terms

RedfernServices Property

Heads of Terms are usually the first document produced in a commercial property transaction and these record the commercial terms agreed between the parties.

The aim is to agree in outline the important terms before legal costs are incurred so they are a useful tool to  save you costs as they avoid arguments between legal advisers over what has been and has not been agreed. Full and clear heads of terms help to identify the structure of the transaction and any issues that may prevent it from taking place, and they speed up the drafting and negotiation of the legal documentation.

Heads of Terms are not meant to form a legally binding contract: they set out the basis on which the parties intend to enter into the deal. To ensure that you do not inadvertently enter into a contract by signing the heads, you should expressly state in the heads that the document is "subject to contract".

If you want the terms to be confidential or to secure a period of exclusivity whilst negotiations are on-going, then you should include a statement to that effect and you should also state that this is to be legally binding.

Legal advisers are not usually involved in preparing the Heads of Terms, but it is advisable to have them look over the final draft before committing to them.

Please contact us for further information.