We always advise that the parties agree upon a set of heads of terms at the outset. This document sets out the main points of the deal, and reduces scope for disagreement between the parties later on.

Generally, the heads of terms are not intended to be legally binding. Certainly, from a buyer’s perspective, until all necessary investigations are carried out, you will want the option to withdraw from the transaction at any point.

However, if the heads of terms inadvertently contain the essential elements of a contract, the parties may end up being unintentionally contractually bound. It is therefore important to instruct solicitors when preparing such documents.