The Foundations Of Your Heads of Terms You Can’t Afford To Get Wrong

Here at Burgh Thorpe Solicitors, our commercial property lawyers know that Heads of Terms are often seen as a quick commercial summary to get a commercial deal going. However, they are so much more important that that. They are the blueprint for the entire commercial transaction. If the blueprint has errors or is flawed, it will affect the entire commercial agreement.

In this blog post our commercial property solicitors in Peterborough share the foundations of your heads of terms that you can’t afford to get wrong.

While you can instruct our commercial property lawyers after the heads of terms have already been agreed, it is much easier for all parties is solicitors are instructed before the heads of terms are agreed. This will help to avoid delays and negotiations. It will also help to avoid the commercial deal falling apart all together.

Having the early involvement from our commercial lawyers with your heads of terms can prevent the most common pitfalls.

For example, you can avoid ambiguous obligations. While a statement like ‘deliver access’ may sound simple enough, without clear clarification it can impose significant and unexpected costs and risks.

You may have obligation terms relating to things such as remediation, third-party rights or infrastructure. These may not be obvious at the commercial stage of the project. However, without the legal support of our commercial lawyers, a developer can unwittingly accept liabilities that dramatically affect the project.

Another foundation of your heads of terms that you can’t afford to get wrong is around planning misalignment. You must ensure that your conditionality and longstop dates align with the reality of the planning timeline. It is important that your drafts are clearly stated so developers are not contractually obliged to meet unrealistic obligations.

Your commercial solicitor will also review the title conditions within the heads of terms. It is often assumed that heads of terms have a clean title. However, this is not an assumption that will stand up in court. Gaps in titles, missing rights of way or unresolved covenants can all lead to changes. These could include timings or pricing.

Heads of terms should not be seen as a formality when it comes to commercial property transactions. It is important that you get them right from the start, with the help of our commercial property law experts. This will help to avoid nasty and costly surprises at a later date.