Heads of terms or what may be referred to as “letters of intent” is a non-binding document often introduced in the early stages of a commercial agreement setting out the main terms of the transaction between the parties involved.

Although the heads of terms are not legally binding, the fundamental terms of a contract are finalised through negotiations between the parties to express their intention of engaging in a transaction.

A heads of terms agreement is critical not only to keep a record of the main points of an agreement but to get these points signed by the other side to enforce a “moral commitment” that may prevent them from renegotiating in the future.

Most likely! It is always essential to keep an eye out for restrictive covenants, particularly on an agreement for sale to protect your interest as well as rights. If the land is registered, it will be useful to investigate what restrictive covenants are already put in place on your land- this can be done by looking into the “Charges Register” of the title document.

Restrictive covenants are clauses that either restrict or prohibit whosoever the contract concerns. Examples of covenants range from restricting someone from making alterations to their property to limiting how many people may access the building.

These are two terms that we hear getting thrown around a lot… but what do they mean?

An indemnity is a promise by the seller to compensate the buyer or target company for any loss suffered for certain specified events. Indemnities are available where damages may not be available, a contrast to a warranty. Indemnities are used in acquisitions with the purpose to make the seller liable for any default and allowing the buyer to be financially compensated if such an event were to occur.

A Warranty is treated more as a condition of a business. A warranty must also contain disclosure of any known issue that the buyer may face. Warranties usually cover all aspects concerning the company or business being sold including specific details that they can account for. If the statements made are later disproved, the buyers can claim for breach of warranty. This encourages transparency between buyers and sellers, as sellers are forced to disclose all known problems to avoid such problems.

A joint venture is a combination of two or more parties that seek the development of a specific project for a certain period and come to a contractual agreement to do so with the common goal of making a profit. The organisations will not only share risks, but pool together resources in the best interests of all parties involved.

A joint venture can be a private company, a public company or a foreign company and can be formed between any legal structure, this includes as a partnership, limited liability company or a corporation.

The law needs to protect those creditors who suffer the risk of payments not being made back from individuals they chose to lend to. For these organisations to protect themselves from unpaid debts, they can engage in procedures via the court. With this help, creditors may seek either a court judgement or they may make an official request for payment through a “statutory demand”.

A statutory demand is a formal written warning that will seek payment of the debt within 21 days from the borrower. If a statutory demand is ignored, the borrower’s refusal to pay may be taken as evidence against them in court and endangers themselves as being declared bankrupt.

Secured transactions are governed by Article 9 of the Uniform Commercial Code and ensure protection for lenders and borrowers. Secured transactions create a security interest in collateral by the borrower, for instance a mortgage or car loans.

This Loan or credit transaction features an element of collateral that protects the creditor if payments are not made. If payment cannot be repaid, the lender is entitled to repossess the borrower’s collateral.

A negotiable instrument is used to formalise a promise to owe a sum of payment to a specified individual at a future date. This is initiated through a transferable signed document and is deemed to have been negotiated upon transfer in accordance with Section 14 of the Negotiable Instrument Act.

The key to getting a commercial dispute thrown out in your favour is to hire an experienced solicitor to guide you through the process.

Commercial disputes can range from a variety of topics such as international trade, commodities, arbitration awards, banking, and financial services. To tackle these matters head-on, you will need to identify the key issues in the case. With this knowledge, your solicitor may be able to work out roughly the length of the trial and prepare you for the pre-trial review accordingly to play to your strengths.