Deal Lingo

legal negotiation terms and phrases

I like to say that it’s my job to learn your language, not your job to learn mine. But there is some common lingo used broadly negotiations, by lawyers and businesspeople alike. You are probably better off learning and using that lingo than relying on me to translate for you, especially on all calls.

There isn’t any standard or official dictionary of these terms. But the following reflects consistent usage I’ve seen in negotiations, usually among American or British lawyers.

All Call

a phone call where both lawyers and businesspeople for both sides get invited

Compare lawyers call.


a person’s ability to make binding commitments for their side

The most important authority is signing authority, the legal right to sign contracts on behalf of a legal entity. But lawyers and negotiators often claim, and sometimes have, effective authority to take final negotiating positions on specific points of a deal.

Balanced Call

an all call where each side has both a lawyer and a businessperson present

Compare unbalanced call.

Clean Copy

a document of a turn with all proposed changes accepted and all comments removed

Contrast redline.

Closed Issue

a term of a deal on which both sides have come to a common understanding

Contrast open issue.

Closing Binder

for complex transactions involving many definitive agreements or other documents, an organized set of all file copies

Some lawyers still physically print and bind closing binders. But ever more often, these are just big PDF files or ZIP archives.

Data Room

anachronistic term for the collection of records made available for due diligence

Data rooms used to be physical rooms stuffed with paper records. Nowadays “digital data rooms” are often online shared folders of PDF and other computer files.

Definitive Agreement

the written agreement that both sides will sign when the deal is done

Contrast term sheet.

Due Diligence

research on the other side or important aspect of a deal, such as property to be purchased

Due diligence frequently involves one side providing corporate records or other private documents to the other side for review.


an agreement or form of agreement attached to a definitive agreement


  • a voting agreement attached to a stock purchase agreement
  • a form of stock purchase agreement attached to a stock option grant

Some lawyers use “exhibit” and “schedule” more or less interchangeably.

File Copy

the final copy of a definitive agreement with signatures from both sides

File copies are the primary evidence both sides keep that a contract was made, in case they need to enforce their contract.

Initial Proposal or First Draft

the first turn in a negotiation

Internal Comment

a comment to a document intended only for people on the same side, not the other side or opposing counsel

Issues List

a list of open issues from one side or the other

Lawyers Call

a phone call where only the lawyers for each side get invited, not the businesspeople

Compare all call.

Master Agreement

a contract with general terms that can apply to many sales, each documented and signed as an order form, statement of work, or similar

Late Hit

an instance of retrading where one side asks for a substantial new concession in a later turn that they could have asked for or warned about earlier

People sometimes honestly forget points they need or want on a deal. But allowing new proposals on closed issues invites manipulation of timing and path-dependencies under the guise of simple ignorance or forgetfulness.

Late hits often come in the form of real or supposed demands from higher-level reviewers, superior management, or others with authority who didn’t directly participate in earlier stages of negotiations. Savvy negotiators often try to head off these kinds of late hits by asking negotiators to clarify their authority before accepting any concessions.

Open Issue

a term of a deal on which both sides have not yet come to a common understanding

Contrast closed issue.

Opposing Counsel

the lawyers representing the other side in a negotiation


figurative concept for form agreements and other documents


  • “We’re happy to start from your paper.” means “We’re open to you preparing the initial proposal using your company’s forms.”
  • “Their paper likely isn’t anything but bad for us.” means “Their forms likely favor their interests strongly over ours.”
The Pen

figurative concept for which side will take the next turn


  • “You have the pen.” means “Your side will take the next turn.”
  • “If you’re alright with us going out of order, we will take back the pen.” means “If you approve, we will take the next turn, even though we took the last turn.

a documented set of changes that negotiators are authorized to make, and the conditions under which they can offer them

Businesses with organized sales teams sometimes prepare playbooks to regulate how their salespeople can negotiate deals on their paper.

Redline or Blackline

a document of a turn formatted to show the changes made to the last turn

Akin to a diff in computer programming.

Lawyers typically use Microsoft Word’s Track Changes or Compare Document functions, or a purpose-built legal comparison program, some of which output PDFs rather than Word files.


sometimes a specific legal term of art, but more often a general term for statements of past or present fact made by one side in a contract, with legal responsibility if they turn out false

Often seen in “representations and warranties”.

Reserve for Comment

language called out in a turn for comment in a later turn

Negotiators often reserve comment when they aren’t yet sure if they can accept proposed language, or when they need more information or approvals from others. Somtimes negotiators reserve comment tactically, to avoid revealing their view or distract from other issues.


going back on issues that were considered closed, or sending a turn with edits to settled language not connected to any open issue.

Retrading is looked down upon, and often harms credibility and trust between negotiating parties.


signing a definitive agreement when you know the other side’s representations or warranties are false, with an eye toward suing them for breach


a document attached to a definitive agreement

Some lawyers use “schedule” and “exhibit” more or less interchangeably.

Settled Language

language in a definitive agreement that one side proposed in a turn and the other side did not either change in their next turn or reserve for comment.

Signature Proposal

a turn with all outstanding issues resolved that a party proposes as ready sign

Term Sheet or Letter of Intent or Memorandum of Understanding

a short document, prepared before any definitive agreement that outlines the major terms of a tranaction

Term sheets are faster to write, easier to change, and friendlier to hands-on work by businesspeople, and not just lawyers. They can help to pin down the most important terms of a negotiation ahead of time, and create a record each side can point back to if the other tries to retrade.

Term sheets are not usually binding contracts. However, in some kinds of deals, like venture capital financings, term sheets may combine non-binding outlines of terms with binding exclusivity agreements.

Turn or Markup

a set of documents showing proposed changes to a definitive agreement and any related documents

After the initial proposal, each turn usually includes a clean copy and redline of each document with proposed changes, plus any comments included in the e-mail or other messages sending them.

Unbalanced Call

an all call where one side lacks either a lawyer or a businessperson on the line

In general, according to the ethical rules for the practice of law, lawyers shouldn’t speak to people they know have their own lawyers without those lawyers present.


sometimes a specific legal term of art, but more often a general term for statements of future fact made by one side in a contract, with legal responsibility if they turn out false

Often seen in “representations and warranties”.