Really, they can be used as an introduction to any trade deal. An agreement reached on the basis that the parties do not intend to be legally bound until they have entered into a more formal contract is generally not legally binding in itself, but may create a strong moral obligation from which it may be difficult to distance oneself later. A duly drafted head of agreement is a non-binding document setting out the main terms of a proposed agreement between the parties. This is what is important to you and what is important for your counterpart to close the deal and take it in that direction. Heads of conditions can be thought of as a policy agreement that provides a framework for the contractual agreement and adds instructions. .