A token of words on a Memorandum of understanding

What is a Memorandum of Understanding?

??Memorandum of understanding is a formal agreement between two or more parties.

???It is a document that describes the mutually agreed points by all the parties involved in a negotiation.

???In general, MoUs are non-binding and non-enforceable agreements. But they also indicate that a binding agreement is near.

Why is an MoU drafted?

??MoU is an important document as it defines the roles and responsibilities of the parties.

???It allows parties to clearly state their goals and objectives.

???It can be helpful in solving any disputes before entering into a binding agreement or contract.

When is MoU drafted?

??Generally, MoU is drafted to avoid legal repercussions.

??It is the basic agreement drafted before any final contract, which clearly specifies the expectations & terms that will be entered in a contract.

??MoUs are the initial steps towards a legal contract or agreement.

MoU is usually used in International treaties, government business and big private businesses.

How to make an MoU legally binding?

For an MoU to be legally binding:

??There should be an intention of parties which expresses the binding nature.

??Few clauses should be inserted which should literally mean that it intends to create legal relations.

Some other details of an MoU-

ü?MoUs may or may not have a definite term.

ü?It is not necessary for MoUs to be stamped.

ü?Even though MoUs are not stamped, they can be enforced when complied with certain legal aspects.