What is a deal memo?
Internet Filmmakers' FAQ
A 'deal memo' is an American term used to describe a document which summarises the key points of a contract between two or more parties. Deal memos are the precursor to a full contract, which ultimately documents the legal agreement between the parties.
Deal memos are used to expedite the negotiation process so that both parties are clear on the top-line particulars before incurring the expense of getting lawyers involved to draft a full contract. In the UK, the equivalent document is sometimes called "heads of terms".
In general, deal memos themselves are usually not legally-enforceable agreements, but to avoid any confusion, they typically include caveats such as" subject to contact'. In some cases, deal memos are signed by the parties to indicate good faith, but this does not preclude the need to ultimately move to a full contract. And it is, of course, extremely poor form to offer a full contract which differs significantly from an agreed deal memo terms. In many cases, this is grounds for walking away from the deal.