When negotiating a complex commercial transaction or relationship, it is common for parties to enter into an agreement in stages (eg, due to the deal being too complex or time-consuming to complete in a single stage or there being uncertainties surrounding the transaction that take time to resolve). For such deals, parties often first enter into a memorandum of understanding (“MOU”) (also referred to as heads of agreement, letter of intent or term sheet). The MOU is a document that outlines the key terms and details of a transaction, generally through both binding and non-binding provisions. The binding provisions govern the process that leads to the execution of a more formal or definitive agreement, while the non-binding provisions lay out the substance of the deal, or the key commercial terms.
As the author of the Corporate law feature explains, there are a fairly standard set of binding procedural provisions that are included in MOUs; however, no such standard set exists for non-binding commercial provisions. As the non-binding provisions generally determine the fate of a transaction, the author sets out a systematic approach that can be adopted to determine the minimal commercial terms that an MOU should contain to ensure that there is a transaction in reach.
Elsewhere in the April issue, the Judicial Review piece examines the recent judicial review proceedings against the approval of the Airport Authority Hong Kong’s Environmental Impact Assessment Report and the grant of an environmental permit for the proposed third-runway system at the Hong Kong International Airport. After analysing the court’s holdings on the four key issues considered during the proceedings, the author highlights a number of points that practitioners should keep in mind when drafting the Form 86. The Insolvency law article discusses the recently enacted Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance (Cap. 32) and its new and improved provisions, concluding with some practical tips for companies and creditors under this new legal regime.
Also included is a Career Development feature that outlines a variety of career management ideas for women in law. Here, the author concludes that while it is important for women to work industriously and conscientiously throughout their careers, neither is sufficient to secure long-term success and security. That can only be achieved by putting thought into what you want your career path to be and making a plan to achieve it.