Legal Definitions - memorandum of understanding

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.