Heads of terms Template for the UK
Generate a bespoke document
What are heads of terms?
A heads of terms template is a short document that records the main commercial points of a deal before the full contracts are drafted. It sets out who the parties are, what is being bought or agreed, the price, key dates, and which terms are meant to bind. Most of it is not legally binding, so both sides can start work knowing what has actually been agreed.
Heads of terms (also called heads of agreement) are used most often in property transactions, share purchases and company sales, and they let both sides move forward knowing what has been agreed. A ready-made head term template saves you starting from a blank page and helps you cover every key term that matters before negotiations move on.
They are normally expressed as not legally binding on the commercial terms, with a short list of provisions that are intended to bind: confidentiality, exclusivity, who bears costs if the deal does not complete, and governing law. Marking the document subject to contract signals the intention, but it is not decisive on its own. Under the law of England and Wales, courts assess what the parties objectively agreed and did, so heads of terms that are acted on can still be held to create a contract. State plainly which clauses bind.
Sample clauses: standard wording in UK commercial property heads of terms
4. Term and security of tenure
4.1 The term is [ten] years from and including the Lease Commencement Date.
4.2 The Lease will be excluded from sections 24 to 28 of the Landlord and Tenant Act 1954. The Landlord will serve the warning notice under Schedule 1 to the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 before the Tenant becomes contractually bound, and the Tenant will give a simple declaration, or a statutory declaration if fewer than 14 days remain between service of the notice and that date.
4.3 The Tenant may end the Lease on the fifth anniversary of the Lease Commencement Date by giving the Landlord not less than six months’ written notice.
4.4 The only conditions to the Tenant’s break are that the Tenant pays the basic rent due up to the break date and gives vacant possession of the whole of the Premises. No other condition applies. Any basic rent, insurance rent or service charge paid in respect of a period after the break date will be refunded to the Tenant within [14] days of the break date.
5. Rent and rent review
5.1 The initial rent is £[amount] per year, exclusive of rates, service charge, insurance rent and VAT, payable quarterly in advance on the usual quarter days.
5.2 The Tenant will have a rent free period of [six] months from the Lease Commencement Date for fitting out, in addition to any further rent free period agreed as an inducement.
5.3 The rent will be reviewed on the fifth anniversary of the Lease Commencement Date to the open market rent of the Premises, assuming a willing landlord, a willing tenant, a term of [ten] years and vacant possession, and disregarding the Tenant’s occupation, any goodwill attributable to the Tenant’s business, and any improvements carried out by the Tenant otherwise than in pursuance of an obligation to the Landlord.
5.4 The rent payable following a review will not be less than the rent payable immediately before the review date.
Illustrative extract showing typical drafting under the law of England and Wales. Documents generated with GenieAI are tailored to your rules, standards and context.
Frequently Asked Questions
When should you use a Heads of terms?
Consider using Heads of terms when you're negotiating any significant commercial deal where the details need careful planning. They're particularly valuable in property transactions, company acquisitions, or joint ventures where you need to nail down the key terms before spending time on full contracts.
These documents prove especially useful when dealing with complex deals involving multiple parties, substantial financial commitments, or extended negotiation periods. Setting out heads of terms early keeps discussions focused on the points that matter, avoids costly misunderstandings, and creates a clear roadmap for drafting the final agreement. They're also useful when you need to secure initial board approval or external funding. For guidance on drafting a term template that fits your own deal, GenieAI tailors each document to your rules and context.
What are the different types of Heads of terms?
- Basic Heads of Terms: Outline core commercial terms like price, timing, and basic obligations - commonly used in straightforward property deals or simple business agreements
- Detailed Commercial Heads: Include more comprehensive provisions covering warranties, conditions precedent, and post-completion matters - typically for complex business sales
- Property Transaction Heads: Focus on specific real estate elements like tenure, permitted use, and service charges
- Investment Agreement Heads: Cover shareholder rights, business valuation, and governance structures for funding deals
- Joint Venture Heads: Address management structure, profit sharing, and exit mechanisms between partnering entities
Who should typically use a Heads of terms?
- Business Owners and Executives: Lead initial negotiations and set key commercial terms for significant transactions or partnerships
- Commercial Property Developers: Use Heads of terms to outline development projects and secure preliminary agreements with investors or tenants
- Corporate Lawyers: Review and refine the terms, ensuring legal precision while maintaining commercial intent
- Investment Bankers: Often involved in drafting preliminary terms for mergers, acquisitions, or funding arrangements
- Company Directors: Review and approve Heads of terms before proceeding with major transactions or joint ventures
How do you write a Heads of terms?
- Basic Deal Terms: Gather essential information like party details, transaction value, and key dates
- Commercial Goals: List main objectives, deal breakers, and any specific conditions each party requires
- Asset Details: Document specific properties, shares, or other assets involved, including relevant valuations
- Timeline Planning: Map out key milestones, completion dates, and any conditional requirements
- Authority Check: Confirm all parties have proper authority to negotiate and sign
- Confidentiality Needs: Identify which terms need confidentiality protection
- Legal Framework: Use our platform to generate a legally sound document that includes all required elements
What should be included in a Heads of terms?
A complete heads of terms template should capture the following, so the final contract can be drafted without gaps:
- Party Details: Full legal names and addresses of all parties involved in the transaction
- Transaction Overview: Clear description of the proposed deal structure and key commercial terms
- Subject Matter: Detailed specification of assets, services, or business elements being transferred
- Key Dates: Timeline for completion, due diligence periods, and important milestones
- Financial Terms: Price, payment structure, and any conditions affecting payment
- Intellectual Property: Where the deal involves brands, software or know-how, note who owns and who licenses any intellectual property once the transaction completes
- Confidentiality Clause: Binding provisions protecting sensitive information
- Dispute Resolution: How any dispute over the terms will be handled, and which jurisdiction applies
- Non-Binding Statement: Clear indication that other terms are not legally binding
- Governing Law: Specification that the law of England and Wales applies to the agreement
If your deal touches confidential information before signing, pair your heads of terms with a non-disclosure agreement so sensitive data is protected from the first conversation.
What's the difference between a Heads of terms and a Terms and Conditions?
Heads of terms are often confused with Terms and Conditions of Sale, but they serve distinctly different purposes in commercial relationships. While both documents outline agreements between parties, their scope, timing, and legal effect differ significantly.
- Legal Binding: Heads of terms are typically non-binding (except for confidentiality clauses), while Terms and Conditions are fully enforceable contracts
- Timing of Use: Heads of terms come early in negotiations to outline key points, while Terms and Conditions govern ongoing business relationships
- Level of Detail: Heads of terms capture main commercial points briefly, while Terms and Conditions provide comprehensive contractual provisions
- Purpose: Heads of terms facilitate negotiation and agreement on key points, while Terms and Conditions set detailed rules for business operations
- Flexibility: Heads of terms can be easily modified during negotiations, while Terms and Conditions remain fixed once accepted
Why Trust GenieAI?
- 244,337 businesses have trusted GenieAI to draft 365,360 legal documents (and growing).
- Across every document GenieAI reviews, the median document carries 4 high-priority risks.
- Vague or ambiguous wording is the single most common problem, at 14.6% of all issues raised.
- GenieAI reviews a full contract, clause by clause, in typically under two minutes.
Source: GenieAI internal data Updated 6 hours ago
About the Heads of terms
- Basic Deal Terms: Gather essential information like party details, transaction value, and key dates
- Commercial Goals: List main objectives, deal breakers, and any specific conditions each party requires
- Asset Details: Document specific properties, shares, or other assets involved, including relevant valuations
- Timeline Planning: Map out key milestones, completion dates, and any conditional requirements
- Authority Check: Confirm all parties have proper authority to negotiate and sign
- Confidentiality Needs: Identify which terms need confidentiality protection
- Legal Framework: Use our platform to generate a legally sound document that includes all required elements
Explore 208,390+ legal templates
Explore 208,390+ legal templates
Genie's Security Promise
Genie is the safest place to draft. Here's how we prioritise your privacy and security.
Your data is private:
We do not train on your data; Genie's AI improves independently
All data stored on Genie is private to your organisation
Your documents are protected:
Your documents are protected by ultra-secure 256-bit encryption
We are ISO27001 certified, so your data is secure
Organizational security:
You retain IP ownership of your documents and their information
You have full control over your data and who gets to see it