RoaldDahl
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LSDefine
Simple English definitions for legal terms
memorandum of understanding
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A quick definition of memorandum of understanding:
A memorandum of understanding is a written statement that outlines the preliminary understanding between parties who plan to enter into a contract or agreement. It is a non-binding document that serves as a starting point for negotiations. Businesspeople usually do not intend to be bound by a memorandum of understanding, and courts typically do not enforce it. However, sometimes a commitment can be made, so it is important to be careful when drafting one. Other terms for memorandum of understanding include letter of intent, memorandum of intent, term sheet, and commitment letter.
A more thorough explanation:
A memorandum of understanding (MOU) is a written statement that outlines the preliminary understanding of parties who plan to enter into a contract or some other agreement. It is a non-binding document that serves as a starting point for negotiations.
For example, two companies may sign an MOU to explore the possibility of a joint venture. The MOU would outline the general terms and conditions of the proposed venture, such as the scope of the project, the responsibilities of each party, and the timeline for completion. However, the MOU would not be a legally binding agreement and would not prevent either party from negotiating with other potential partners.
While an MOU is not legally binding, it can still have some legal implications. In some cases, a court may find that a commitment has been made based on the language used in the MOU. Therefore, it is important to carefully consider the wording of an MOU and seek legal advice if necessary.