Non-Binding Term Sheet
Definition
A Non-Binding Term Sheet is a document outlining the terms of an investment agreement that is not legally enforceable.
Benefits
Non-binding term sheets facilitate negotiations, clarify intentions, and set the groundwork for final agreements without legal commitments
Frequently Asked Questions
What does non-binding term sheet mean? A non-binding term sheet means that the terms outlined in the document are not legally enforceable and serve as a preliminary agreement to guide further negotiations.
Are term sheets legally binding? Term sheets can be either binding or non-binding. A non-binding term sheet is not legally enforceable, whereas a binding term sheet obligates the parties to the terms outlined.
What are binding and non-binding terms? Binding terms are legally enforceable and must be adhered to by the parties involved. Non-binding terms are preliminary and serve as a basis for further negotiations without legal obligation.
Summary
Non-binding term sheets are valuable for outlining preliminary terms in negotiations, allowing parties to discuss and refine the details before committing to a legally binding agreement.