Answers · Heads of agreement
What is a heads of agreement in a property sale, and is it binding?
Direct answer
A heads of agreement (HoA) is a document setting out the key commercial terms agreed between a buyer and vendor — price, key dates, major conditions — before a full contract is drafted. It's usually intended as a non-binding framework for the lawyers to build the formal contract from, though specific clauses can be made binding if the parties choose.
The purpose of a HoA is speed and clarity: rather than negotiating every legal clause up front, the parties agree the commercial substance of the deal — what's being sold, for how much, on what timeline, subject to what — and record it in a short document. That shared understanding then guides the solicitors drafting the actual contract of sale.
Whether a HoA is binding depends entirely on its wording. Most are expressed as non-binding 'subject to contract', meaning either party can still walk away until the formal contract is signed — though some HoAs deliberately make specific terms binding, such as an exclusivity or confidentiality period. That distinction matters enormously, so the document should say plainly which parts (if any) are intended to bind.
Because the binding effect turns on precise drafting, this is general information only — anyone entering a heads of agreement should have it reviewed by their own solicitor before signing, to be clear on exactly what they are and aren't committing to.
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