Document background
The Term Sheet for Sale of Business is a crucial preliminary document used in Australian business sale transactions to establish the fundamental commercial understanding between parties before proceeding to detailed documentation. This document serves as a roadmap for the transaction, outlining key terms such as price, structure, and conditions while considering Australian legal requirements and market practices. It is typically used during the initial stages of a business sale negotiation, after preliminary discussions but before detailed due diligence and final documentation. The term sheet helps parties align on key commercial points early in the process, reducing the risk of misunderstandings during later negotiations. While mostly non-binding, it often includes certain binding provisions such as confidentiality, exclusivity, and costs, and must be drafted with consideration of Australian corporate law, competition regulations, and relevant state/territory requirements.
