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Heads of terms is a preliminary document that outlines the key points of a future agreement before creating the full contract. It captures what both parties have agreed to in principle, like price, timelines, and core obligations, while leaving room for lawyers to work out the finer details later.

Under Nigerian contract law, Heads of terms (also called memorandum of understanding) isn't usually legally binding, though some sections like confidentiality clauses can be. It's particularly useful in complex deals like property sales, business mergers, and joint ventures, helping parties move forward with confidence while saving time and legal costs during early negotiations.

Use Heads of terms when starting complex negotiations that need a clear roadmap, especially in Nigerian business deals like real estate developments, corporate mergers, or joint ventures. It helps capture the main points you've agreed on while discussions are fresh, preventing misunderstandings and keeping momentum going.

This document proves particularly valuable when dealing with multiple stakeholders, handling sensitive commercial information, or navigating regulatory requirements. For example, when structuring an oil and gas partnership or planning a major construction project, having the key terms documented early helps secure leadership buy-in and speeds up the final contract process.

• Simple Agreement Heads: Basic outline covering essential deal points, commonly used for straightforward business transactions and property deals in Nigeria
• Binding Framework Heads: Contains specific enforceable provisions like confidentiality and exclusivity, while keeping main terms non-binding
• Detailed Commercial Heads: Comprehensive version listing business terms, conditions, and timelines - popular in oil/gas and infrastructure projects
• Term Sheet Style: Condensed format focusing on financial terms and key metrics, frequently used in investment and funding arrangements

• Business Owners & Executives: Lead initial negotiations and set key commercial terms for the Heads of terms, especially in SMEs and family businesses
• Corporate Legal Teams: Review and refine terms, ensure compliance with Nigerian law, and protect company interests
• Investment Bankers: Draft preliminary terms for mergers, acquisitions, and financing deals in Nigeria's financial sector
• Property Developers: Outline development agreements and joint ventures for real estate projects
• External Legal Counsel: Provide specialist advice and help transform Heads into final binding contracts

• Basic Deal Information: Gather company details, key contact persons, and proposed transaction scope
• Commercial Terms: List core business points like pricing, payment terms, and delivery timelines
• Party Authority: Confirm signatories have proper authorization under Nigerian corporate law
• Key Conditions: Identify any regulatory approvals, permits, or third-party consents needed
• Confidentiality Needs: Determine which terms require privacy protection
• Timeline Planning: Set realistic deadlines for finalizing the full agreement
• Document Format: Use our platform's templates to ensure legally sound structure and complete coverage

• Party Details: Full legal names, addresses, and registration numbers of all involved entities
• Deal Structure: Clear outline of the proposed transaction or arrangement
• Key Commercial Terms: Core business points including pricing, payment terms, and deliverables
• Non-Binding Statement: Clear declaration that the document is not legally binding (except specific clauses)
• Confidentiality Clause: Terms protecting sensitive information shared during negotiations
• Timeline: Key dates and deadlines for completing the final agreement
• Governing Law: Explicit statement that Nigerian law applies to any binding provisions
• Signature Block: Space for authorized representatives to sign and date

Heads of terms often gets confused with Terms and Conditions, but they serve distinctly different purposes in Nigerian business law. While both documents outline agreements, their scope, timing, and legal force differ significantly.

• Legal Binding Nature: Heads of terms is primarily non-binding and sets preliminary agreement points, while Terms and Conditions create immediate, enforceable obligations
• Timing of Use: Heads of terms comes early in negotiations as a stepping stone to final contracts, while Terms and Conditions govern ongoing business relationships
• Level of Detail: Heads of terms captures broad key points and major terms, while Terms and Conditions spell out specific rights, obligations, and operational details
• Purpose: Heads of terms guides future contract development, while Terms and Conditions regulate current business operations and transactions