Term Sheet - Sale of Business
A Term Sheet - Sale of Business establishes the general terms of an agreement in the sale of your business.
4.4 (22 reviews)
Last updated February 3, 2025
Under 5 minutes
Suitable for Australia
Written by
Edwin Montoya Zorrilla
Reviewed by
Damin Murdock
Document Overview
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.
The Legal Risk Score of a Term Sheet - Sale of Business Template
Our legal team have marked this document as medium risk considering:
- The confidentiality clause restricts disclosure of any information contained in the Term Sheet without prior written consent, which could limit the parties' ability to freely communicate details of the transaction to outside advisors or interested parties.
- The requirement for the Vendor to refer all clients, customers, and enquiries to the Purchaser post-completion may impact the Vendor's business operations and relationships negatively if not managed carefully.
Users familiar with such transactions might find this document standard, but should still consider each clause's implications carefully to ensure alignment with their interests and capabilities.
Term Sheet - Sale of Business Checklist
Complete your free Term Sheet - Sale of Business with our checklist
Ensure Confidentiality Compliance
Ensure that all parties involved adhere to the confidentiality clause to prevent unauthorized sharing of sensitive information.
Notify Employees and Clients
Follow through with the requirements to notify employees and clients as stipulated, ensuring smooth transition and compliance with the terms agreed upon.
Complete Financial Obligations
Ensure that all financial responsibilities, including the payment of stamp duty by the Purchaser, are fulfilled according to the agreed terms.
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:
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Here's what people say about Lawpath’s Term Sheet - Sale of Business
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saved the day
This document save the day. a godsend. Quick and Easy
Janine
Perth Aug 28 2020, 9:45 AM
What an easy way to create legal documents
I'm selling my business and I thought that the process would be difficult. With LawPAth its been easy
John
Melbourne Sep 20 2018, 2:00 AM