Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Heads of terms definition

What does Heads of terms mean? Heads of terms set out the key commercial points the parties agree at the start of a deal to guide negotiation and drafting of the definitive contract. They are also called heads of agreement, memorandum of understanding (MOU), letter of intent, pre‑contract protocol or term sheet. Not defined by legislation, the expression is used across corporate, real estate and commercial contexts. Enforceability turns on intention, wording and conduct. In England & Wales, Northern Ireland and Ireland, heads of terms are typically non‑binding if marked subject to contract, but discrete provisions—such as confidentiality, exclusivity/lock‑out, allocation of costs, and governing law/jurisdiction—can be...

A Seller’s Guide to Managing and Transferring Environmental, Health and Safety Liabilities, Permits and Contaminated Land in Share and Asset Sales: Due Diligence, Warranties, Indemnities, Insurance and Climate Risk

Published by a LexisNexis Environment expert

Practice notes

Why do environmental issues need to be considered at the outset of a corporate transaction?

Environmental and health & safety (EHS) matters should be addressed at the heads of terms stage because:

Clean-up costs for legacy contaminated land can represent one of the biggest financial exposures in a deal
Environmental audits can take weeks (an intrusive phase 2 often lasts six to eight weeks). A seller may upload its own environmental reports to the data room to bolster negotiations on price and indemnities
Where an environmental permit must be transferred, the process may take two to four months, or longer
Smaller companies are frequently not compliant with health & safety legislation. The seller may commission an asbestos survey or implement a health & safety policy and manual

See Practice Notes:

Heads of terms—share and asset purchases
Data rooms—share and asset purchases

Are there any environmental liabilities that the seller needs to transfer?

Environmental liabilities arising from existing contamination, polluting activities and environmental permits can, in some circumstances, remain with the seller after completion. From an environmental perspective, the seller’s aim will...

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Web page updated on 21/05/2026

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