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Published 29 abril 2019
Heads of Terms serve a purpose: outlining the main terms of any deal.
Those key terms often change during the course of negotiation, and it is not unusual for commercial terms agreed in final documents to materially differ from those set out in the Heads of Terms. There may not always be a written record of how the agreed terms have evolved over the course of a transaction and it may be tempting to let a mistake go uncorrected in the expectation that it may be commercially beneficial. However, at best this could create a risk of litigation. At worst, it may result in a successful claim for rectification by unilateral mistake.
Unilateral changes to significant terms that find their way in to final documents may well be susceptible to challenge if they have not:
Although the court cannot usually consider the surrounding negotiations of a deal to assist a construction and interpretation exercise, this is not the case in rectification where evidence of negotiations is admissible.
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