Memorandum of Understanding(MOU)
A memorandum of understanding (MOU) is a written document recording the intentions and key terms agreed between parties before a formal contract. It is typically non-binding as to the deal itself, though specific clauses like confidentiality and exclusivity can be made binding.
What it means
A memorandum of understanding sets out the mutual understanding of parties moving toward a transaction or partnership. Whether an MOU binds the parties depends on the language and intent: clear "non-binding" wording keeps the substantive terms aspirational, while certain provisions (confidentiality, exclusivity, governing law, costs) are commonly carved out as binding. MOUs are common in joint ventures, partnerships, and acquisitions and closely resemble a letter of intent.
Read more
- Memorandum of Understanding (MOU): Complete Guide (2026) — A memorandum of understanding (MOU) records shared intent before a binding contract. Learn what one is, what to include, and when to use one.
- Letter of Intent (LOI) Guide: What It Is and How to Write One (2026) — A letter of intent (LOI) outlines preliminary deal terms before a binding contract. Learn what to include, which clauses are enforceable, and common mistakes to avoid.
- What Makes a Contract Legally Binding? — Learn the five elements every legally binding contract must have — offer, acceptance, consideration, capacity, and legality — with real examples and jurisdiction notes.