• A memorandum of understanding is an agreement between two or more parties outlined in a formal document. It is not necessarily legally binding, which depends on the signatories’ intent and the language in the agreement, but signals the willingness of the parties to move forward with a contract.
• The MOU can be seen as the starting point for negotiations as it defines the scope and purpose of the talks. Such memoranda are most often seen in international treaty negotiations but also may be used in high-stakes business dealings such as merger talks.

Significant Informations

• A memorandum of understanding (MOU) is a document that describes the broad outlines of an agreement that two or more parties have reached.
• MOUs communicate the mutually accepted expectations of all of the parties involved in a negotiation.
• While not necessarily legally binding, the MOU signals that a binding contract is imminent.
• The MOU is most often found in National/International relations.