A heads of agreement is a non-binding document that outlines the basic terms of a tentative partnership agreement or transaction. Also known as a heads of terms, or letter of intent, a heads of agreement marks the first step on the path to a full legally binding agreement or contract and a guideline for the roles and responsibilities of the parties involved in a potential partnership before any binding documents are drawn up. Such a document is commonly used in commercial transactions, such as the purchase of a business.
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