How to negotiate or agree on terms for a transaction
When it comes to negotiating and subsequently finalising a transaction it can be extremely useful for all parties to agree to the main terms of the transaction in summary form upfront.
Summarising and documenting some key terms in the early stages can assist in avoiding any confusion throughout the negotiating process. It can help with instructions when drafting the subsequent agreements and can help you to reduce your overall legal costs.
We recommend that you consider including some common summary points when negotiating your next transaction:
- What are the purposes and objectives of the transaction and what you are trying to document?
- List what the main points of the agreement are. This can include the parties, price, what is being sold or purchased and when together with any conditions precedent and any special conditions;
- Agree upon the timing so it is clear when deposits need to be paid, the timing of interim payments, the date and times by which any parties must perform any acts and an ultimate settlement;
- Is the transaction subject to finance and if so, on what terms?
- Are there to be any warranties or guarantors? If so list them;
- If the transaction does not proceed, does each party pay their own costs or can one of the parties retain monies (i.e. the deposit)?
- Is the Heads of Agreement to be binding or not?
We have vast experience advising clients throughout the negotiation process. We can discuss with you the best terms to summarise and document upfront in your next transaction to ensure you achieve an effective and agreeable final outcome.
