When should I use a term sheet?

Use a term sheet for venture or growth financing discussions, complex commercial deals that need a shared term map, or situations where counsel will draft long-form documents next. Sources: Cornell LII: Offer (https://www.law.cornell.edu/wex/offer); Cornell LII: Agreement (https://www.law.cornell.edu/wex/agreement).

They overlap. Term sheets are often more tabular and finance-oriented; a letter of intent (https://www.formabledocs.com/templates/loi) is often more narrative. Pick the format your counterparties expect. Sources: Cornell LII: Offer (https://www.law.cornell.edu/wex/offer); Cornell LII: Agreement (https://www.law.cornell.edu/wex/agreement).

Can I download this term sheet template?

Yes. Use Download .docx to get a Word file with placeholders such as [Party A] and [Effective Date]. You can edit it in Word or Google Docs, or create a filled-in version in the free contract creator (https://www.formabledocs.com/contract-creator/term-sheet).

Is the sample legally binding as shown?

No. Placeholder sample text is a starting point. It becomes an agreement for your deal after you fill in the details—manually or in the free contract creator—and the parties sign. Read the binding-effect clause: economics are usually a map for later documents, while confidentiality often binds now. Sources: Cornell LII: Offer (https://www.law.cornell.edu/wex/offer); Cornell LII: Agreement (https://www.law.cornell.edu/wex/agreement).

When should I use the free contract creator instead of editing the file?

Use the free contract creator if you want guided choices for deal type, who you are, the transaction summary, economics, governance, other key terms, discussion window, governing law, and optional exclusivity, without hunting through every blank yourself.

Term Sheet template

A headline-terms template that guides a fuller purchase, investment, or commercial agreement.

Create contract for free

What this contract contains

Preamble and parties. Names the term sheet and each party. Choose the deal type and your side in the creator.

Purpose and transaction. States that this is a term sheet and summarizes the proposed deal. You write the summary in the creator.

Economic terms. Lists valuation, price, or other headline economics. You type these in the creator.

Governance and other terms. Captures board, control, or other key points you want on the shared map. Both fields are optional in the creator.

Confidentiality. Protects the fact of the talks and the terms on this sheet while definitive documents are drafted.

Binding effect. Separates non-binding economics from duties that apply now, such as confidentiality and governing law.

Governing law. Sets the state law that governs the term sheet and where disputes must be brought. Choose the jurisdiction in the creator.

General. Covers assignment limits, waiver rules, severability, entire agreement language, notices, and counterpart or electronic-signature execution language.

Signature blocks. Authorized signatory and title lines for each party, ready for wet-ink or e-signature fields.

TERM SHEET

This Term Sheet (the "Term Sheet") is entered into as of [Effective Date] (the "Effective Date"), by and between:

[Party A], a corporation ("Investor"), and

[Party B], a corporation ("Company").

Each may be referred to as a "Party" and together as the "Parties." This non-binding Term Sheet records the Parties' current intentions so they can negotiate a definitive agreement, and creates no liability except where it expressly says otherwise.

1. Purpose. The Parties intend to pursue an investment on the terms summarized below, with final details to be set out in a separate binding agreement (the "Definitive Agreement"). This Term Sheet is meant to assist negotiation of the Definitive Agreement and does not require either Party to enter into one.

2. Proposed Transaction. The Parties currently intend the following transaction: [description of the proposed transaction].

3. Economic Terms. The proposed economic terms are: [headline economic terms].

4. Governance and Control. The governance and control terms under discussion are: [governance or approval terms under discussion].

5. Confidentiality. Each Party has disclosed or may disclose information about its business that is confidential or proprietary in nature, or that should reasonably be understood as confidential or proprietary given its nature and the circumstances of disclosure ("Confidential Information"), including this Term Sheet and its terms. Neither Party will (a) use the other's Confidential Information for any purpose other than evaluating and negotiating the transaction described in this Term Sheet; nor (b) disclose it to anyone else, except to employees and advisors who need to know it and are bound by comparable obligations, or as required by law after reasonable advance notice where legally permitted. Each Party will protect the other's Confidential Information using at least the same protections it uses for its own similar information, and no less than a reasonable standard of care. This section is binding on the Parties.

6. Binding Effect. Only the sections titled Confidentiality, Governing Law and Jurisdiction, and General are binding on the Parties. Every other section of this Term Sheet records the Parties' current intentions and creates no legal obligation or liability for either Party. Neither Party is obliged to enter into a Definitive Agreement, to continue negotiations, or to agree to any particular term, and either Party may end discussions at any time for any reason without liability. Nothing in this Term Sheet limits what a Definitive Agreement may contain. If the Parties have not signed a Definitive Agreement within 60 days after the Effective Date, this Term Sheet expires automatically, though the binding sections listed above survive that expiry.

7. Governing Law and Jurisdiction. This Term Sheet and all matters relating to it are governed by, and construed in accordance with, the laws of Delaware, without regard to its conflict of laws provisions. Any legal suit, action, or proceeding relating to this Agreement must be instituted in the state or federal courts located in Delaware, and each Party irrevocably submits to the exclusive jurisdiction of those courts. This section is binding on the Parties.

8. General. This Term Sheet is the entire understanding between the Parties about its subject and may only be amended by a writing signed by both Parties. This Term Sheet may be executed in counterparts, including electronic copies, each of which is an original and which together form the same agreement. This section is binding on the Parties.

By signing this Term Sheet, each Party acknowledges the intentions outlined above and agrees to the binding sections as of the Effective Date.

Investor: [Party A]

By: ________________________________

Name: [Signatory]

Title: [Title]

Company: [Party B]