Trustpilot
ISO 27001 Certified
Welcome to Simply-Docs
Corporate
Employment
Health & Safety
Property
Samples & Free
Business
Commercial Agreements

Memorandums of Understanding & Exclusivity Templates

Contracts form the foundation of virtually all commercial transactions and play a fundamentally important role in business. It is therefore important to ensure that all terms of binding contracts are carefully negotiated, drafted and signed. A tool to help achieve that aim is a pre-contract, non-binding “Heads of Terms” document, created as a pre-cursor to a definitive detailed binding contract. Such pre-contract documents are often employed in commercial life wherever there is discussion of terms of an important proposed contract. 

Such Heads of Terms documents are also commonly known as “Memoranda of Understanding (MOUs)” or “Letters of Intent (LOIs)” or “Term Sheets”. The benefits of using such pre-contract documents are explained in the Guidance Notes: Heads of Terms, Memoranda of Understanding, Letters of Intent and Term Sheets which can be found in this subfolder, and you are strongly recommended to read it before using any of the templates in this subfolder.

This subfolder contains a range of guidance and pre-contract documents designed to deal with the initial discussion of a proposed arrangement and then the negotiation, recording and signing of a definitive detailed commercial contract.

Pre-contract documents can, where appropriate, include exclusivity / lockout clauses prohibiting the parties from dealing with a third party during the period when they are negotiating a deal with each other. This subfolder therefore also includes a number of exclusivity / lockout templates.

Memorandums of Understanding & Exclusivity Templates is part of Business . Just £38.50 + VAT provides unlimited downloads from Business for 1 year.

Frequently Asked Questions

We are negotiating a big deal. Should we sign heads of terms first, and are they binding? +
Heads of terms, also called a memorandum of understanding, letter of intent or term sheet, record the main points before the full contract and are normally not legally binding if marked subject to contract. They focus the negotiation and reduce misunderstandings. Certain clauses, such as confidentiality, exclusivity and costs, are usually made binding on purpose. Read the guidance note in this subfolder before using the templates.
Which parts of a heads of terms document actually bind us? +
Only the parts you intend to bind, and you should say which those are. The commercial terms are usually non-binding and subject to contract, while confidentiality, exclusivity or lockout, costs and governing law are commonly stated to be binding. Labelling each section stops a court finding an unintended contract. The templates and guidance note are structured to separate binding from non-binding provisions.
Can I stop the other side talking to competitors while we negotiate? +
Yes, with an exclusivity or lockout clause. English law will enforce an agreement, given for good consideration, not to negotiate with anyone else for a specified, finite period. It will not enforce an open-ended promise to negotiate in good faith, which is too uncertain. So make the lockout time-limited and supported by consideration. This subfolder includes exclusivity and lockout templates for exactly this situation.
Is marking documents subject to contract enough to stop us being bound by accident? +
It is the key protection, though not a magic phrase. Marking documents and emails subject to contract signals that there is no binding deal until the formal contract is signed. But conduct showing both sides treated themselves as bound can still, in some cases, create a contract. Keep the label consistent, avoid starting performance and hold any binding terms in clearly marked clauses.
What is the difference between an MOU, a letter of intent and a term sheet? +
In practice, very little. All three are pre-contract documents recording the outline of a proposed deal before the binding contract, and the label matters less than the wording and whether the document is subject to contract. A memorandum of understanding, letter of intent or term sheet can each be binding or non-binding depending on how it is drafted. The guidance note in this subfolder explains the choices.
Business Buy Only £38.50 + VAT!
Unlimited Downloads for One Year
No Auto-Renewal
All Commercial Agreements

Simply-4-Business Ltd Registered in England and Wales No. 4868909, 20 Mortlake High Street, Mortlake, London SW14 8JN

Trustpilot
Top