A Term Sheet - Sale of Business sets out the general idea of the agreement before you proceed to the full agreement. This document is intended to be used as a precursor agreement to a Business Sale Agreement. Term Sheet - Sale of Business gives you an overview of the potential agreement in purchasing a business or selling your business. This overview is helpful in conducting your due diligence, and is useful in negotiating a better deal for both parties. It makes it easier for both parties to later reach an agreement, and hopefully lead to a sale of the business.  

As such, parties can decide whether the term sheet should be binding or not. Making it non-binding gives the parties greater freedom to change the terms of the transaction as negotiations progress, however it also means that the parties could call off transactions for any reason with no recourse given to the other party for the time and effort they have invested in the transaction going ahead.

Overall, a term sheet should be viewed as a transitional document for the vendor to prepare the business for sale at an operational level, ensuring that its value is maintained, and for the purchaser to ensure that they know what to expect when buying the business.

Use this Term Sheet - Sale of Business if:

• You are looking to purchase a business, and would like to set out some general terms as an overview and/or for negotiation.

What does the Term Sheet - Sale of Business cover?

• The parties to the agreement;
• The assets included in the purchase price;
• The assets excluded in the purchase price;
• The liabilities of both parties;
• The completion date;
• The purchase price;
• The payment terms;
• Any conditions precedent, warranties, costs included;
• Confidentiality clause; and
• Option to be binding.

Other names for Term Sheet - Sale of Business include:

• Sale of Business Pre-Nup; and
• Heads of Agreement to Sale of Business.

Other documents you may need:

• Term Sheet – Investor
• Business Sale Agreement
• Heads of Agreement