Heads of Terms set out what you have agreed in principle -- but are they enforceable? The answer is more nuanced than you might think.
Heads of Terms (also called a Letter of Intent, Memorandum of Understanding, or Term Sheet) are a preliminary document that records the key terms of a deal before a full contract is drafted. The question every business owner asks is whether they are legally binding.
Most Heads of Terms are not legally binding -- but some clauses within them are. It depends entirely on how the document is drafted.
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