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Head Of Terms Agreement for Australia

Head Of Terms Agreement Template for Australia

A Head of Terms Agreement is a preliminary document that outlines the key commercial terms and conditions agreed between parties before entering into a detailed definitive agreement. Under Australian law, this document serves as a framework for negotiation and typically includes both binding and non-binding provisions. While generally non-binding in nature, certain provisions such as confidentiality, exclusivity, and costs may be explicitly binding. The document is governed by Australian law and follows Australian commercial practice, incorporating relevant considerations from the Competition and Consumer Act 2010 and other applicable legislation.

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What is a Head Of Terms Agreement?

The Head of Terms Agreement is a crucial preliminary document used in Australian business transactions to establish the fundamental terms of a proposed deal before proceeding to detailed documentation. It is particularly valuable in complex commercial transactions, mergers and acquisitions, joint ventures, and significant commercial arrangements where parties need to agree on key commercial terms before committing resources to full documentation. The document typically combines non-binding commercial terms with certain binding provisions (such as confidentiality and exclusivity) and serves as a roadmap for negotiating definitive agreements. Used across various industries in Australia, it helps parties align their expectations early in the transaction process and provides a structured framework for further negotiations while considering Australian legal requirements and commercial practices.

What sections should be included in a Head Of Terms Agreement?

1. Parties: Full legal names and details of all parties to the agreement

2. Background: Context of the proposed transaction and relationship between the parties

3. Definitions: Key terms used throughout the document

4. Transaction Overview: High-level summary of the proposed transaction or business relationship

5. Key Commercial Terms: Essential business terms including pricing, payment terms, and key deliverables

6. Timeline: Key dates and milestones for the transaction, including conditions precedent and completion dates

7. Binding Terms: Specification of which terms are legally binding and which are non-binding

8. Confidentiality: Terms regarding the treatment of confidential information exchanged during negotiations

9. Good Faith Negotiations: Commitment to negotiate the definitive agreements in good faith

10. Costs: Responsibility for costs and expenses during the negotiation period

11. Governing Law: Specification of applicable law and jurisdiction

12. Execution: Signature blocks and execution details

What sections are optional to include in a Head Of Terms Agreement?

1. Exclusivity: Terms preventing parties from negotiating with other parties for a specified period - include when exclusivity is required during negotiations

2. Due Diligence: Framework for the due diligence process - include when substantial due diligence is required

3. Break Fee: Provisions for payment if the transaction doesn't proceed - include for significant transactions where abort costs need to be addressed

4. Regulatory Approvals: Required regulatory clearances - include when the transaction requires specific regulatory approvals

5. Public Announcements: Rules for making public statements about the transaction - include for high-profile deals or when one party is publicly listed

6. Material Adverse Change: Conditions allowing withdrawal if material changes occur - include for longer-term negotiation periods

7. Intellectual Property: Protection of IP during negotiations - include when significant IP will be disclosed during discussions

What schedules should be included in a Head Of Terms Agreement?

1. Key Commercial Terms Schedule: Detailed breakdown of principal commercial terms and conditions

2. Timeline Schedule: Detailed timeline of key dates, milestones, and deadlines

3. Due Diligence Requirements: List of required due diligence items and process

4. Required Approvals: List of necessary internal and external approvals

5. Assets/Business Schedule: High-level description of assets or business included in the transaction

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Australia

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions






























Clauses

























Relevant Industries

Financial Services

Real Estate

Mining and Resources

Technology

Manufacturing

Healthcare

Retail

Infrastructure

Energy

Agriculture

Telecommunications

Professional Services

Transport and Logistics

Education

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Strategy

Commercial

Business Development

Risk & Compliance

Executive Leadership

Operations

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Commercial Director

Managing Director

Head of Mergers & Acquisitions

Business Development Manager

Corporate Development Manager

Investment Director

General Counsel

Legal Counsel

Transaction Manager

Company Secretary

Finance Director

Strategy Director

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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