Memorandum of Understanding (MoU)
Lay the foundation of building a stronger relationship by signing a Memorandum of Understanding.


Businesses cannot grow in isolation and thus, relationships are instrumental in doing deals, extending products and offerings and growing business. These relationships, however, are important to be built over strong foundations and thus, it's important to sign a Memorandum of Understanding Agreement with the other party. Memorandum of Understanding is an agreement executed between two or more willing parties. Though not legally binding, it indicates the willingness or intention of the parties involved, to proceed with the contract.

How are MoU's written?

  1. Authorisation letter is signed to get attorney on board
  2. Details are discussed with attorney
  3. MoU terms are defined in a signed contract, consisting of: Scope of services provided, Documentation requirements, and responsibilities, Timelines for the deliverables, Mutually agreeable terms of engagement

Details Required

  1. Names and Identification of parties
  2. Engagement to be shared
  3. Terms of engagement
Why should I get an NDA?

With any business deal, it is important that both parties understand each other's goals and objectives. MOU is a great asset for business relations.

Is MOU legally binding?

No, MOU does not constitute a legally enforceable obligation and is commonly used for a non-binding contract. If a MoU has been drawn for consideration, like for exchange of money, etc., the document would become binding on the parties, else it is a non-binding contract. Clauses such as jurisdiction clause, applicable law, indemnification have binding effects to the agreement.

Is MoU need to be registered?

No, there is no mandate for the registration of MoU. However, However, if the MOU incorporates an agreement to purchase immovable property worth more than Rs. 100/- and if you need to produce it in the court, it should be registered.

As MoU is not registered, can anyone enter an MoU?

The parties must be qualified to enter into a contract. This means that they must be more than 18 years old, must be of sane mind, and not considered as insolvent/ bankrupt. The consent must be free and not affected by coercion, or undue influence.

Who can use a Memorandum of Understanding?
  1. Companies or Organisations to enter a relationship
  2. Conducting diligence check in case of investments, strategic partnerships
  3. Govt departments sign MoU with another departments of same or other govt.
  4. Individuals, Trusts, NGOs, Company Representatives etc
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