Memorandum of Understanding

A Memorandum of Understanding (MOU) is a formal, non-binding agreement between two or more parties outlining the terms and details of a potential partnership or collaboration. Though not legally enforceable, it signals the intention to work together and can serve as a precursor to a more binding contract. The MOU lays out the framework of understanding, including the roles, responsibilities, and expectations of each party, without yet committing them to any specific legal obligations.

Example:
Suppose two companies, Tech Limited (a technology solutions provider) and EduTech (an online education platform), want to collaborate on developing a new e-learning platform. Before entering a full-scale contract, they might sign an MOU outlining the following:

Objective: Develop a comprehensive online education platform.
Responsibilities:
- Tech Limited will provide the necessary software development expertise.
- EduTech will offer its existing educational content and user base.
- Timeframe: Six months to finalize a detailed partnership agreement.
- No Legal Commitment: Both parties understand that this MOU is non-binding and serves as a basis for further discussion.

This MOU provides a roadmap for negotiations and sets clear expectations, but it doesn’t legally obligate either party to complete the project.