A Full and Complete `Deal Sheet` Is a Must

IF ROBERT FROST had had a lawyer brother, the brother might have said: “Good deal sheets make good transactions.” A fence is nothing but an indication of where two people have clearly met. So is a “deal sheet,” also known as a non-binding letter of intent. Without such a memorandum detailing all the particulars of the transaction, Landlord and Tenant – really more likely their lawyers – can end up “negotiating through the documents.”

“Negotiating through the documents” is always bad. This process means that the lawyers are not simply putting the agreed-upon terms into an agreement, but are settling some of the issues, or more realistically not settling them, by drafting different alternatives. Each side then rejects the other’s drafts, not because they are mis-drafted, but because they address unresolved parts of the deal. How did this expensive exercise in futility occur? Generally because someone in the proposed transaction felt that if the parties invested a lot of money in architectural and legal fees, and put psychic energy and time into the deal, they would be motivated to settle the problem points that were not settled at the beginning. (As Custer said, “Let’s just get started.”)