About the Course
Introduction
This CLE webinar will discuss the potential binding effect of term sheets in M&A deals even after definitive agreements are signed. The panel will review lessons learned from recent cases that involved surviving term sheet provisions and provide practical drafting tips to avoid surprises and safeguard a transaction from costly mistakes.
Description
Deal parties often use term sheets in the early stages of negotiations to establish a high-level framework for a transaction before expending additional time and resources on due diligence and the negotiation of more definitive deal documents. Terms sheets outline the crucial deal terms including the valuation of the target company, the high-level deal structure and financial terms, management expectations, transaction logistics, and the exclusivity period.
Term sheets are intended to serve a limited purpose and are later replaced by a definitive set of agreements that include the full set of deal terms. While term sheets are typically considered non-binding, they can, in some circumstances, become binding on the parties as illustrated in several recent Delaware Chancery Court decisions.
Counsel must understand when a term sheet remains in force and is not superseded by a later agreement to protect their clients from unwanted surprises down the road. Careful drafting is necessary for both the term sheet and the final documentation as most deals may warrant the inclusion of a termination and/or integration clause to ensure the desired result for the client.
Listen as our authoritative panel explains the potential lasting impact of term sheets on M&A transactions and provides drafting tips for mitigating the unintended consequence of a term sheet superseding the terms of a subsequent definitive agreement.
Presented By
As the head of Mayer Brown's Private Capital Solutions practice, Mr. Dhanawade advises the world's most sophisticated investors and dealmakers on complex capital deployment and capital-raising strategies across all market cycles. Leading private equity sponsors and their portfolio companies, private credit funds, sovereign and sovereign-backed investors, family offices, and other institutional investors regularly rely on his advice to develop creative solutions that align legal strategy with business objectives. Mr. Dhanawade has extensive experience across a broad range of sectors, including technology and software, business and financial services, mortgage, chemicals, real estate, healthcare and pharmaceuticals, manufacturing, media and entertainment, aviation, aerospace and defense, and education.
Mr. Favia is an accomplished trial lawyer who represents public companies, private equity firms, including their portfolio companies and private credit firms in their most sensitive litigation matters, with a particular focus on M&A disputes and other complex commercial litigation. He frequently represents clients in pre and post-closing M&A disputes, delivering favorable outcomes that preserve deal value. These include disputes involving alleged breaches of fiduciary duties, shareholder rights, MAE/MAC clauses, working capital, earn-outs, purchase price adjustments, representations and warranties, indemnification, and alleged fraud. Mr. Favia is a recognized thought leader in M&A litigation, with frequent publications in the Harvard Law School Forum on Corporate Governance, The American Lawyer, The Review of Securities & Commodities Regulation, and other leading outlets.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Wednesday, January 28, 2026
- schedule
1:00 p.m. ET./10:00 a.m. PT
I. Overview: the role and importance of term sheets in M&A transactions
II. Terms sheets vs. letters of intent: understanding the similarities and differences
III. Key components of an M&A term sheet
IV. Recent cases illustrating circumstances when a term sheet superseded a subsequent definitive agreement
V. Drafting considerations for term sheets and subsequent definitive agreements
A. Factors causing term sheets to survive
B. Express termination of term sheets
C. Appropriate scope of terms sheets
VI. Practitioner pointers and key takeaways
The panel will review these and other key considerations:
- What is the purpose of a term sheet, and how is it different from a letter of intent?
- What crucial deal terms are typically included in a term sheet?
- What have recent Delaware cases illustrated regarding the potential binding effect and superseding power of terms sheets?
- What are some key drafting strategies to account for term sheets in transactions and to avoid the unintended consequence that a term sheet supersedes final deal documentation?
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