Heads of agreement

Whether the purchase is a box of matches or a multi-national corporation, the first essential is for the buyer and seller to agree on exactly what is being bought and sold. In the case of a dental practice, where different circumstances may leave scope for 'grey areas' or misunderstandings with the potential to later derail a successful transfer, agents will usually ask the seller to sign a heads of terms agreement, effectively a sales prospectus, to confirm the basic terms; for example price, apportionment and any other fundamental terms.

In the majority of cases the matter then proceeds with any detailed issues being negotiated by the solicitors for each party as part of the process of agreeing the terms of the sale and purchase contract; however sometimes parties, particularly corporate buyers, may insist on the lawyers drafting more detailed heads of agreement to narrow the issues that could arise further down the line before the contract is drawn up.