Negotiations usually begin with the circulation of a letter of intent or term sheet. Usually, letters of intent/term sheets are nonbinding for both parties, but may include an (binding) exclusivity clause. Confidentiality obligations are usually binding.

• Exclusivity: Exclusivity provisions are usually included in term sheets and letters of intent.
• Break fee: Break fees are increasingly being seen, particularly during an auction process.
• Confidentiality: Confidentiality provisions are usually included in term sheets and letters of intent.

Separately negotiated confidentiality or nondisclosure agreements are almost always drafted as a first step in a potential transaction. Depending on the transaction setup, it is also common to include exclusivity agreements. Break fees (if any) are usually not supplemented with separately negotiated agreements.

Under Austrian law, the parties are free to abstain from concluding a contract at any point until they have reached full consensus on all issues still outstanding; that is, until one party has fully accepted the other party's offer. Until such full consensus has been reached, in principle, no party should assume that a contract will, in the end, be concluded, and, therefore, each party generally acts at its own risk. This principle, however, is modified by the general duty to act in good faith. Legal academics and Austrian courts, therefore, provide that as soon as the parties enter into contractual negotiations, there is a pre-contractual duty to safeguard the other party's interests. Neither party may mislead the other concerning its own willingness and honesty to conclude the contract, especially if one party is aware that the other party is incurring expense in leading to the conclusion of the contract but knows it is not itself willing to close the deal (for whatever reason).