It is not uncommon for parties to enter into a term sheet or a letter of intent to set out the commercial terms of the transaction. Such terms are not typically binding, but parties will often provide for certain binding terms, e.g., confidentiality and exclusivity.

• Exclusivity: Exclusivity provisions are commonly included in term sheets/letters of intent.
• Break fee: Break fees are not common provisions in term sheets/letters of intent. In Malaysia, deposits are more commonly requested by local sellers (either at the time of execution of the term sheets/letters of intent or the share purchase agreement). It is rare for the seller to ask for the payment of a break fee.
• Confidentiality: Confidentiality provisions are commonly included in term sheets/letters of intent.

Once the term sheet has been signed and the parties progress to a definitive agreement, the agreement will typically contain a confidentiality clause. An exclusivity clause is not usually included in the definitive agreement. The definitive agreement will not usually have an exclusivity clause because it is not necessary, as the agreement itself constitutes a binding legal commitment to proceed with the transaction based on the terms of the agreement. Break fee clauses are not common in Malaysia.

There is no general duty or obligation to negotiate in good faith unless expressly provided for in the term sheet or letter of intent.

Similarly, it is uncommon for parties to agree, in a term sheet or letter of intent, on "break fees" payable in the event that the sale and purchase agreement is not entered into.