Document background
The Purchase Term Sheet is a foundational document used in commercial transactions under Indian law to document the preliminary understanding between parties regarding a proposed purchase transaction. It is typically used when parties have reached a basic commercial understanding but need to document key terms before proceeding with detailed due diligence and final documentation. The document includes essential elements such as purchase price, payment terms, conditions precedent, timeline, and any special conditions, while considering Indian legal and regulatory requirements. While most provisions are typically non-binding, certain sections like confidentiality and exclusivity may be made binding. The Purchase Term Sheet serves as a roadmap for lawyers drafting the final purchase agreement and helps avoid misunderstandings about key terms during later stages of the transaction.
