Duhaime's Law Dictionary


Memorandum of Understanding (MOU) Definition:

A document which generally is not intended to be legally binding but, if meeting the other criteria, can be, in law, a contract.

Related Terms: Modi Vivendi, Treaty

In the world of commerce or international negotiations, a MOU is considered to be a preliminary document - an agreement to meet and discuss - not a comprehensive agreement. Rather an interim or partial agreement on some elements, in some cases a mere agreement in larger principle, on which there has been accord, and on which a legally binding, comprehensive contract can be premised.

In fact, some MOUs are merely agreements to share information or to meet regularly and continue discussions or negotiations on an issue.

Most MOU’s imply - but do not guarantee - that something more is eventually expected.

For one example of judicial treatment, Justice Pilladino of the Commonwealth Court of Pennsylvania wrote in Pennsylvania Social Services Union, Local 668 v. Commonwealth of Pennsylvania, Department of Labor & Industry, Bureau of Workers' Compensation:

"A memorandum of understanding is not a contract; nor is it a collective bargaining agreement. It cannot be considered to have the same effect as a collective bargaining agreement."

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