A Memorandum of Understanding is just the agreement that the parties sign prior to the formal contract. Undoubtedly, talks may drag on for a very long time, so it’s important to be clear about what each party is agreeing to or working to resolve.

In essence, this document highlights the parameters under which the parties will cooperate in an agreement, contract, or joint venture. A memorandum of understanding is essentially when parties cooperate to achieve a common goal without entering into a legally enforceable agreement.

An MOU highlights and clarifies the fundamental objective of the parties to a contract even though it is not a formal contract. Typically, governments use this type of arrangement when they sign international treaties.


According to Indian law, an MoU is only upholdable in court when it complies with the requirements of the Indian Contract Act, 1872. The parties in an MoU must have a binding legal connection for there to be a genuine agreement.



Clarifies intentions of the parties: One of the MOU’s primary goals is to make the parties’ intentions known. Typically, it takes time for two parties to engage into legally binding contracts. The parties would not want to carry out this process in a way that wastes time or money. Therefore, creating a Memorandum of Understanding is simple and makes the parties’ intentions apparent.

Highlights the effort done: The MOU highlights all the preparation work done before a contract or agreement between two or more parties is started. The major goals of the project or job would be clearly stated in this.

No Legal Advice Is Needed: To draught a Memorandum of Understanding, no legal advice is necessary. The MOU is simple to draught.

Negotiation:  Despite the MOU’s lack of legal force, the parties can nonetheless outline their principal goals. In addition, the parties are free to discuss their respective contract interests.


  • Name of the parties: Normally, the MOU would include the names of the parties in the first section. If there are multiple parties, the MOU must list the names of all parties.
  • Project Information: The MOU must include information on the proposed work conducted in the following area. Any work that the parties are required to complete must be indicated under this section. Project scope: Information on the activities that the project will cover will be included in the project’s scope.
  • DURATION OF PROJECT: Any pertinent information about the project’s duration will also be included in the MOU. This would specify how long the parties’ connection or agreement will last. This clause requires that any renewal-related information be included as well.
  • PARTIES’ ROLES AND RESPONSIBILITY: The parties’ respective duties and obligations would be listed under this heading. This must specify what each party is required to do and what they are not allowed to do. If there is a problem that causes a departure from the typical roles, it must be indicated


The final document created to verify that both parties have indeed reached an agreement with mutual consent is the memorandum of understanding. Although it is not difficult to prepare this document, it must be carefully reviewed to ensure that the parties’ agreed-upon terms have been met.

By comprehending the negotiation and their agreement on the ultimate value, the products, services, how to distribute the product, and much more, it must address the crucial aspects of the dialogue. The parties are not permitted to change the conditions of the MOU after it has been created.

It would be helpful to write down the topics that must be included in the MOU as the parties’ negotiations move forward. This would be essential to the parties’ relationships working smoothly. Numerous issues that have been orally agreed upon must be recorded in the form of the agreement. This would be necessary because the MOU’s contents will determine the type of connection the parties will have. Therefore, it is crucial to record the MOU, Once the agreement is written down, it can be referred to if there is a divergence from how business is typically conducted between the parties.


Every memorandum of understanding must contain a crucial phrase known as comprehensive confidentiality if you want to ensure that your information has not been disclosed to your adversaries. Before drafting a memorandum of agreement, you must include a clause stipulating that any communications between the parties will be kept private and never made public.

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