Sellers get this wrong in both directions. Some treat the entire document as binding and concede points they never needed to concede. Others treat none of it as binding and hand over a long exclusivity period without a thought — which is the one clause that genuinely costs them.
Binding and Not Binding
Generally binding: confidentiality provisions, the exclusivity period, costs provisions, and any governing law clause. Generally not binding: price, structure, conditions and timetable — the commercial terms, usually expressed to be subject to contract and not intended to create legal obligations. The wording matters more than people assume. A document that is not clearly marked subject to contract, or that reads as a concluded bargain rather than a statement of intent, can create arguments about whether a binding agreement was reached — and that is a needless dispute at the worst possible moment. Checking it takes a minute. What belongs in the document: the parties, what is being sold, the structure, the price and how it is payable including any retention or deferred element, the key conditions, exclusivity, confidentiality, costs, and a clear subject-to-contract statement. That is all.
Why Short Is Better
Heads of terms exist so that the solicitors are drafting the same deal, and so the few genuinely binding points are fixed. A long heads of terms means the sale agreement is being negotiated twice — once in a document that does not bind and again in one that does — which costs time, costs fees, and reliably produces inconsistencies between the two that someone then has to reconcile. There is a second reason to keep it tight. Every commercial point conceded in heads of terms is a point conceded before due diligence has told anyone anything, and it becomes the baseline from which the rest of the negotiation runs. The price in particular is an anchor that moves in one direction: difficult to raise afterwards, and straightforward for a buyer to reduce once due diligence turns something up — with the seller negotiating from inside exclusivity. And before any of it, the NDA, which is genuinely binding and worth more than a signature on a template when the person about to see your customer list and margins may be a competitor.
Worth an hour before signing rather than a month afterwards. Particularly the exclusivity period, the costs clause, and whether the document is properly expressed to be subject to contract.
Been sent heads of terms? 01 5827148.
Richard O’Shea — Solicitor & TEP
Solicitor at Mary Molloy Solicitors, established 1981, and a TEP of the Society of Trust and Estate Practitioners. The firm acts for buyers and sellers on business sales and acquisitions — structure, heads of terms, due diligence, the sale agreement, warranties and disclosure, completion and what follows it. Because a substantial share of Irish business sales are retirement exits, the firm’s estate and succession practice sits alongside the transactional work: the deal and what happens to the proceeds are usually the same client’s problem. Nothing here is tax advice — structure is tax-driven and that belongs with your accountant and Revenue, before heads of terms are signed. 01 5827148 · richardoshea@marymolloysolicitors.com · LinkedIn
General information, not legal advice. This website contains general information about Irish law on business sales and acquisitions. It is not legal advice and does not create a solicitor—client relationship. Every transaction turns on its own facts — the structure, the documents, the parties, the consents required — and advice on yours requires a consultation.
Nothing here is tax advice, and tax drives structure. The choice between an asset sale and a share sale is very largely a tax question, and it should be settled with your accountant or tax adviser, and by reference to Revenue’s own guidance, before heads of terms are signed rather than afterwards. This firm does not advise on tax, does not state rates, thresholds, reliefs or conditions, and does not indicate any tax outcome.
No valuation advice. This firm does not value businesses, does not suggest multiples and does not advise on price. Valuation is for accountants and corporate finance advisers, and it is a separate exercise from the legal work.
Never both sides of the same deal. The firm acts for buyers and, in separate transactions, for sellers — but never for both parties to the same sale. Conflicts are checked at first contact, before any substantive discussion, which is why the first email should name every individual and entity involved.
No outcome or timeline is promised. Nothing on this site states or implies that a transaction will complete, that a consent will be obtained, that a warranty claim will succeed, or that any deal will proceed to a particular timetable. Where another jurisdiction is involved, the law of that jurisdiction applies to what happens there and requires local advice; this firm advises on Irish law only.
Fees. Fees are agreed in writing with the client at the outset. In contentious business, a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.