Common line of action. MOU
know that a Memorandum of Understanding (MOU) cannot be legally enforced?
Memorandum of Understanding (MOU) describes a bilateral or multilateral agreement between two or more parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement. It is a more formal alternative to a gentlemen's agreement.
The MOU document ensures that all parties in the agreement understand their roles and activities, thereby decreasing misunderstandings and future conflicts. Despite this benefit, the MOU is a non-obligating and legally non-binding document. What this means is that parties to the MOU are not obligated to perform their roles in the MOU and they are not legally bound by the document. Thus if “Party A” was to deliver goods to “Party B” at a specified time under the MOU, “Party B” cannot compel “Party A” to do so by any legal action.
What to do?
Let the MOU be a predecessor to a formal agreement
Enter into a formal agreement that will bind parties
Use the MOU only if you do not intend to enforce the terms against defaulting parties.
Be guided!
Shelley Anoka (Mrs.)
Memorandum of Understanding (MOU) describes a bilateral or multilateral agreement between two or more parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement. It is a more formal alternative to a gentlemen's agreement.
The MOU document ensures that all parties in the agreement understand their roles and activities, thereby decreasing misunderstandings and future conflicts. Despite this benefit, the MOU is a non-obligating and legally non-binding document. What this means is that parties to the MOU are not obligated to perform their roles in the MOU and they are not legally bound by the document. Thus if “Party A” was to deliver goods to “Party B” at a specified time under the MOU, “Party B” cannot compel “Party A” to do so by any legal action.
What to do?
Let the MOU be a predecessor to a formal agreement
Enter into a formal agreement that will bind parties
Use the MOU only if you do not intend to enforce the terms against defaulting parties.
Be guided!
Shelley Anoka (Mrs.)
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