How to Document Your Deal
The world is full of astute entrepreneurs who can run a profitable business, handle the marketing, budgeting, tax, employment and countless other details. Yet, even those who can sense a good commercial deal and have the acumen to negotiate the terms are often uncertain how to document their deal.
This uncertainty isn't becuase the process is so hard. It's just that nobody has ever explained it to them. So, let's remedy that right now!
Photo by Nicholas_T
How to Document Your Deal
Whether you’re selling your business, signing-up for a project, or finalising any other deal, the first step is to get a good overview of the deal in your own mind. Always remember basic concepts and keep reverting to a macro view of your overall strategy so you can maintain your bearings.
There is considerable flexibility in how a deal is documented and progressed. The main aim in any deal, and any well-drafted legal document, is clarity of the key terms: What is to be done? When? How much is to be paid? Who is liable if things go wrong? Of course, many other issues must eventually be recorded and there’s no shortage of distracting issues.
A deal should be built to suit the particular transaction, its timetable and each party’s concerns. Interim documents can sometimes be bypassed or selectively used – just like selecting a particular item from a legal tool kit. The only really mandatory document is the final detailed Agreement.
Keep the transaction simple and don’t let the other party bamboozle you with unnecessary complexity or with jargon and terminology.
Let’s work through what they are seeking in a Deed of Confidentiality, Deed of Non-Disclosure, Deal Memo, Term Sheet, Heads of Agreement, Memorandum of Understanding or Letter of Intent.
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