Document background
The Legally Binding Term Sheet is a crucial document in Dutch business transactions where parties wish to create immediate legal obligations while negotiating more detailed agreements. It serves as a bridge between initial negotiations and final documentation, typically used in mergers and acquisitions, joint ventures, significant investments, or complex commercial transactions. Under Dutch law, this document must clearly indicate which provisions are intended to be binding and incorporate essential elements required for contract formation under the Dutch Civil Code. While more streamlined than a full agreement, the term sheet must be carefully drafted to ensure enforceability while providing sufficient flexibility for detailed terms in subsequent agreements. It typically includes key commercial terms, conditions precedent, timelines, and binding provisions regarding confidentiality and exclusivity.
