Memorandum of Understanding

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What is an MoU?

MoU stands for Memorandum of understanding. MoU means, mutually agreed set of statements for the understanding. The MoU can be presented as an effective and technical tool for establishing clear objective and targets. The MoU is exchange of words between the parties, and the MoU can be enforceable if those words say so. It is the first stage of the making of a contract. To be legally operative, MoU must identify the contracting parties, spell out the subject matter of the agreement and its objectives, summarise the essential terms and must be signed by the contracting parties.

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Advantage

1

Covers Entire Relationship.

2

It saves Time because it provides a framework to quickly negotiate agreements. Therefore, the same terms need not be repetitively negotiated for deals that are very similar to each other.

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FAQ

A Memorandum of Understanding (MOU) is a formal agreement between two or more parties. Companies and organizations can use MOUs to establish official partnerships.

An MOU helps the parties to clear the arrangements so as to speed up the process of negotiation in relation to the agreement. It is not intended to be a legally binding document. If you want a legally binding document then an MOU is not appropriate.

Agreement is any document which is enforceable by Law. You can have substantial rights in Agreement and not in MOU. MOU is a legal document describing a bilateral agreement between parties.

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