M&A Foundations · glossary
A short document recording the outline commercial deal before full contracts are drafted — also called a term sheet, letter of intent (LOI) or memorandum of understanding. Deliberately non-binding on the deal itself, though chosen provisions such as exclusivity and confidentiality are made binding. Chapter 6
Explained in Chapter 6, Term Sheets and Heads of Terms, of M&A Foundations.
Also explained in Legal Due Diligence, Venture Deals, Drafting Skills (Heads of terms and Term sheet) and Negotiation Skills.
In this edition, see also Term sheet.
At some point early in a deal — after the confidentiality agreement, usually before serious due diligence — the parties write down the outline of their bargain. That short document goes by a remarkable number of names: heads of terms (or “heads of agreement”, or just “the heads”), term sheet, letter of intent (LOI), or memorandum of understanding (MOU). English lawyers tend to say heads of terms; bankers and Americans say term sheet or LOI; MOU turns up in cross-border and…Read Chapter 6, Term Sheets and Heads of Terms →
Every chapter of M&A Foundations is free to read, including the full training share purchase agreement.
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Where this term lives
This term is part of one complete fictional deal, with every document attached and a test after every chapter. Open M&A Foundations → · All terms A–Z →