Many people come a cropper with 'heads of agreement' When they do so they feel embarassed. 'Why didn't we get the damn agreement finished?' Well on the two principles that the bigger they are, both the harder they fall, and the more fun it is to watch, we can see April 2002) the spectacle of the disagreement between ITV2 and the Football League. This was an agreement (or almost) to pay to the football league £150 miilion for the exclusibve rights to show lower league football on digital TV. We all know that both sides got their glasses steamed in the anticipatory excitement of making a lot of money, but then could not see what was really happening. They agreed a fee which was ludicrously high. The result is unhappiness all round. Except for the lawyers.

The parties agreed basic terms, but no final agreement was ever formally concluded. The whole thing went ahead on the basis of a 'heads of agreement' document. I should be surprised, and I should be disappointed. The truth is that that is often how business works. Those conducting the business just want to get on with it, and do not want to have to invent an entirely new kind of wheel.

I am sure here also that as time went on, the TV company began to recognise the deep hole into which it had flung itself. To sign the agreement would have been like nailing up your own coffin from the inside. They didn't want to do it.

In practice, it may not have made much difference. ITV2 cannot pay anyway, and it acepts that it owes the money. It may be that the parent companies Carlton and Granada might come to think they should have signed it, since it might then have clarified their own responsibilities.

If you have any doubts, read Heads of Agreement - our own law-byte on the topic.