Document background
The Asset Purchase Agreement Term Sheet is a crucial preliminary document used in German M&A transactions involving the sale and purchase of business assets. It is typically prepared following initial commercial discussions and before detailed due diligence begins, serving to memorialize the parties' preliminary understanding of key transaction terms. The document addresses essential elements required under German law and commercial practice, including asset identification, pricing mechanisms, and condition precedents. While generally non-binding except for specific provisions (such as confidentiality and exclusivity), it provides the framework for negotiating the definitive asset purchase agreement and guides the due diligence process. The term sheet is particularly important in German transactions as it helps ensure alignment with specific requirements of German commercial and corporate law while establishing clear parameters for the transaction structure.
