Sales Documents  >  Closing the Deal

Term Sheet Template

Maria S Georges
Maria S Georges
Business Law Attorney, LLM

A Term Sheet document, typically presented in a bullet-point format, outlines the main terms and conditions of a buyer's provisional, non-legally binding offer, i.e. a written offer to purchase (acquire) a business.


A Term Sheet generally serves the same purpose as a Letter of Intent, Proposal to Buy a Business, or Purchase Offer, although the form of the document may differ.

It is typically originated on the buyer's side.

Once the document has been signed by both parties, due diligence can start, with the intention of concluding negotiations on a final Business Sale Agreement.

Related: Term Sheet Template (version 2)

View other legal forms and templates for selling/buying a business.


Purpose of this Agreement:

This Term Sheet, also referred as the "Agreement", establishes the intention of the (insert Buyer name), henceforth known as the "Buyer", to acquire the assets/stock (delete one as appropriate) of (insert business or corporation name) from (insert Seller name), henceforth known as the "Seller".

The Buyer and Seller are henceforth to be referred to collectively as the "Parties" to this Agreement (or "Party" where referred to individually).

This Term Sheet Agreement supersedes any previous Agreements between the Parties.

By signing this agreement the Parties confirm:

  • Their authority to enter negotiations and execute the terms within this document and any subsequent Agreements;
  • their intention to enter into a binding Business Sale Agreement according to the terms in this document (which once signed by both Parties shall supersede any previous Agreement, including this one).

Important note: this Term Sheet represents an offer by the Buyer to purchase the business assets/stock (delete one as appropriate) from the Seller under the terms detailed in this document. Apart from the confidentiality and non-compete provisions, nothing in this Term Sheet (or any previous Agreement, which this document supersedes) shall be binding on either Party.

Details of parties to the Agreement:

(Insert Business name, mailing address, short description of the business)

(Insert Seller name, mailing address, email, phone)

(Insert Buyer name, main point of contact, mailing address, email, phone)

Purchase Price:

$250,000 before any agreed adjustments to working capital at the point of deal closure.

Payment Terms

The following schedule of payments shall apply:

Earnest payment (deposit)

$12,500 (5% of purchase price)

Cash down payment


Promissory note

$200,000 (the balance, purchase price less cash down payment)

Payment guarantees, collateral

Insert details of security provided by the buyer

Term of promissory note

2 years

Interest rate applied

5% p.a.

Amortized over

3 years

Payment amount

$25,000 plus interest


Quarterly (schedule TBC)

Due Diligence

The Seller will provide to the Buyer all details required for Due Diligence as previously agreed between the Parties (according to Schedule A attached).

Due Diligence to take place under the following conditions:

Materials made available to Buyer

Maximum 5 working days following signature of this Term Sheet document by the Seller

Length of Due Diligence

30 days from receipt by the Buyer of all materials on the schedule

Deal closure

Maximum 30 days following the conclusion of Due Diligence

Confidentiality statement

The Parties agree to apply strict confidentiality, not only to the content of this Term Sheet, but also regarding its existence. Information may only be shared with nominated representatives of the respective Parties including legal and financial advisers, or to public and governmental agencies if the Party’s lawyers rule that such disclosure is necessary to comply with applicable law. Both Parties declare that measures will be taken to ensure that these nominated individuals maintain confidentiality.

This confidentiality clause is binding on both Parties for one year from the date this Agreement is issued to the Buyer by the Seller.


The Seller agrees that he/she will not negotiate directly or indirectly with any other party concerning the sale of his/her business whilst this Term Sheet Agreement is in force.

Key employee agreements

As part of the final sale conditions the Buyer is required to enter employment continuity agreements with following staff:

1. James Baker

Head Chef







Agreement duration and governance

The following other considerations form part of this Term Sheet Agreement:

Signature protocol

Seller to sign and return a copy of this Term Sheet to the Buyer within a maximum 5 working days from confirmed receipt by the Seller, otherwise the Term Sheet is deemed to have expired.

Expiry date

This Term Sheet automatically expires if a Business Sale Agreement is not signed by both Parties within 30 days of the agreed completion date for Due Diligence.

Termination clause

Prior to entering a Business Sale Agreement this Term Sheet can be terminated at any time, by either Party, through a written email notice or letter.

Law governing this agreement

The State law of (insert State) governs this Term Sheet.

Resolution of disputes

Whilst this Term Sheet is effective, any dispute between the Parties shall invoke its automatic termination.

Signatories to this agreement

Signed (Buyer): ..................... Date: ...............................

Print name: ........................... Title: ................................

Counter signed by:

Signed (Seller): .................... Date: ...............................

Print name: ........................... Title: ................................

(List Schedules, attached)

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