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MOU (Memorandum of Understanding) Drafting
All you know about MoU (Memorandum of Understanding) drafting
Memorandum of Understanding (MoU) is an agreement between two
(bilateral) or more (Multilateral) parties outlining the rights and obligations
of the parties to the agreement. It carries a degree of seriousness and mutual
respect, stronger than a gentlemen’s agreement. Often, MOUs are the first steps
towards a legal contract.
In business, a MoU is typically an agreement between two (or
more) parties, that outlines terms and details of a mutual understanding or
agreement, noting each party's requirements and responsibilities.
Advantages
Common
Intentions - Both
parties understand each other’s goals and objectives. MOU is greatly beneficial
as parties are able to set out their requirements and expectations.
Enhance
Security - MOU’s
provide a great safeguard to reduce the risk of uncertainty in expectations and
objectives. Specifically, this is beneficial in commercial partnerships and
relations where the engagement is over a prolonged period.
Time saving- Less
time consuming and avoid the legal implications as involved in a contract.
How
MoU Works
- It indicates that the parties have reached an understanding and are moving forward. Although it is not legally binding, it is a serious declaration that a contract is imminent.
- A
memorandum of understanding 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 legally binding, the MOU signals that a binding contract is imminent.
- The MOU is most often found in international relations.
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