You might be interested: they are all different expressions that mean the same thing: pre-agreements or pre-contractual agreements. They are trying to reduce complexity at an early stage in order to reach a trade agreement. The final contractual conditions will follow again. It is a succinct, succinct and structured summary of the basic contractual conditions. Most of the time, they are not meant to contain any detail like this. However, for parts of the terms to be legally binding, they should be signed or otherwise used for the constitution of the treaty, so that it is legally binding. Here are examples of some of the different forms of trade definitions and declarations of intent in models: in economics, they are also called « Term Sheets », « Memorandum of Understanding », « MOU », « Letters of Understanding », « Heads of Agreement », « Heads of Terms Agreement » and « Letters of Interest ». Once both parties have reached a broad consensus on a partnership or transaction and signed an agreement document, the next step is to involve lawyers and accountants in order to clear the details. This information may include a number of conditions that must be met before a final agreement is concluded. The next step is the signing of a binding contract, although an agreement can be terminated at any time by both parties with some reservations. There`s nothing wrong with having legally binding heads of terms, provided that the terms you don`t want to be bound to aren`t legally binding..