A letter of intent or term sheet will be entered into in many privately negotiated transactions. Typically, a letter of intent or term sheet would be nonbinding on the parties except in relation to clauses such as confidentiality, governing law and dispute resolution. However, the parties should clearly set out in the letter of intent or term sheet whether the parties intend to be bound or not (or that only certain clauses shall be binding). If the parties do not provide that the document is not intended to be binding, it will generally be considered binding under Swedish law.

• Exclusivity: A term sheet customarily includes provisions on exclusivity during a certain period of time.
• Break fee: Break fees are rarely used but it is possible to implement and enforce break fees where the parties agree. If break fees are used, they typically intend to cover the costs of due diligence, etc.
• Confidentiality: A term sheet customarily includes provisions on confidentiality.

A confidentiality undertaking or a nondisclosure agreement governing primarily the exchange of confidential information relating to the transaction is often negotiated as a separate agreement at the outset of a transaction and before the parties start exchanging information in connection with a potential transaction, or enter into any other term sheet or agreement. Other provisions are typically not supplemented with separately negotiated agreements. The term sheet is usually considered sufficient.

There is no general duty to act in good faith. A party is free to continue discussions in connection with a potential purchase agreement as long as there is a chance, no matter how small, that a transaction may occur as a result of the negotiations. If, however, it becomes clear to a party that it will not pursue a transaction, such party should not continue negotiations in bad faith. If a party continues negotiations knowing that there will not be a transaction, such party may be held liable to pay (restitution) damages.