Document background
The Asset Purchase Agreement Term Sheet is a crucial preliminary document used in Canadian business transactions when one party intends to acquire specific assets from another. It is typically employed during the early stages of negotiations to document the fundamental understanding between the parties before proceeding with detailed due diligence and the preparation of definitive agreements. The term sheet captures essential commercial terms including price, payment structure, key assets, conditions precedent, and timeline, while operating within the framework of Canadian federal and provincial laws. Although mostly non-binding, it serves as a roadmap for lawyers drafting the final agreement and helps identify potential issues early in the transaction process. This document is particularly important in complex asset purchases where clarity on key terms is essential before incurring significant transaction costs.
