M&A Foundations · glossary
The label showing a document or negotiation is not intended to be binding until formal contracts are signed. It rebuts the intention to create legal relations — the reason heads of terms and draft-stage emails do not accidentally become contracts. Chapter 6
Explained in Chapter 6, Term Sheets and Heads of Terms, of M&A Foundations.
The defining feature of heads of terms is that the commercial terms are not intended to be legally binding. English law lets the parties achieve that simply and reliably. A contract needs an intention to create legal relations. The phrase subject to contract is long-established shorthand for “we do not intend to be bound until a formal contract is signed”. Head the document “subject to contract”, say expressly which paragraphs are and are not intended to bind, and the courts…Read Chapter 6, Term Sheets and Heads of Terms →
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Where this term lives
Every chapter of M&A Foundations is free to read, including the full training share purchase agreement. It 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 →