Document background
An Asset Purchase Agreement Term Sheet is a preliminary document used in South African commercial transactions to establish the framework for asset acquisitions. It is typically employed during the initial stages of negotiations when parties have agreed on basic commercial terms but before conducting detailed due diligence or drafting the final agreement. The document captures key transaction elements including asset identification, pricing, payment structure, and conditions precedent, while considering South African legal requirements such as competition law thresholds, exchange control regulations, and sector-specific compliance needs. While most provisions are non-binding, certain sections like confidentiality and exclusivity are typically binding. This term sheet serves as a roadmap for legal counsel drafting the final Asset Purchase Agreement and helps identify potential issues early in the transaction process.
