A term sheet is used to start the negotiations by agreeing on the key terms of the deal, while leaving the specific legal language once the terms are agreed upon. We have seen many parties spend dozens of hours and thousands of dollars in attorney fees when they have not agreed on the basic terms and structure of the deal. A term sheet can be as simple as a sheet of paper with your agreement regarding the basic terms. You should agree on the following: price, terms, due diligence period and closing date.