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...

Commercial lease break clauses: negotiating tenant and landlord rights, conditions precedent, notices, rent apportionment, rent review, underleases, LTA 1954 security and common pitfalls (England and Wales)

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Practice notes

Negotiation Guide

Part of the Practical lease negotiation collection, this Negotiation Guide sits alongside the Practice Note: New starter guide—entering into new commercial leases. A lease granted for a term of years may include a mechanism allowing the parties, or just one of them, to bring the lease to an end before the term expires. This is commonly called a break option (also known as a break clause, or an option to determine). A break clause can be operated:

at any time after a specified date (a ‘rolling break’)
on one or more specified dates
upon the occurrence of identified events

Where the break is conferred on the tenant, it is a tenant’s break option (or tenant’s break right), and where it benefits the landlord, it is a landlord’s break option (or landlord’s break right). The parties may alternatively agree mutual break rights, giving both landlord and tenant the ability to terminate the lease. This Negotiation Guide outlines the principal components of a break clause suitable for inclusion in a lease of commercial premises...

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Web page updated on 21/05/2026

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