Duhaime's Law Dictionary

MOU Definition:

Abbreviation of Memorandum of Understanding. A document intended to become a contract but which, if meeting other criteria, can be recognized, in law, as a contract.

Related Terms: Treaty, Modi Vivendi

Abbreviation for "Memorandum of Understanding".

The United Nations Treaty Handbook defines a MOU (Memorandum of Understanding) as follows:

"The term memorandum of understanding (M.O.U.) is often used to denote a less formal international instrument than a typical treaty or international agreement. It often sets out operational arrangements under a framework international agreement. It is also used for the regulation of technical or detailed matters.

"An M.O.U. typically consists of a single instrument and is entered into among States and/or international organizations. The United Nations usually concludes M.O.U.s with Member States in order to organize its peacekeeping operations or to arrange United Nations conferences. The United Nations also concludes M.O.U.s regarding cooperation with other international organizations. The United Nations considers M.O.U.s to be binding and registers them if submitted by a party or if the United Nations is a party."

Australian Bernard Wall describes a Memorandum of Understanding as follows:

"An MOU is a document recording the basic terms of a proposed transaction.

"Conceptually, the idea is that the parties sign the MOU in the pre-contractual stages of negotiations with the intention of continuing negotiation and ultimately signing a more formal contract at a later stage (often after the involvement of legal and other advisors).

"In general, an MOU can be used to provide:

  • A framework for the parties to negotiate a final contract.
  • A record of key terms agreed on to date.
  • Detail of fundamental arrangements or a party's commitment for the benefit of third parties such as financiers or potential investors.
  • Mechanisms dealing with pre-contractual issues such as exclusivity, confidentiality, due diligence and intellectual property.
  • Some degree of comfort that a deal is possible before the parties incur further expense....

"Whether an MOU is legally binding on the parties depends on the circumstances. Key issues that commonly arise when determining if an MOU is binding are: (1) did the parties intend to be bound by the obligations set out in the MOU; (and, 2) is the MOU sufficiently clear and certain to be legally binding?


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