Home What A what is a signed agreement ?

A what is a signed agreement ?

A what is a signed agreement ?
A what is a signed agreement ?

What is Memorandum of Understanding? A what is a signed agreement ?

Memorandum of Understanding (MoU) (A what is a signed agreement ?), known as Letter of Intent, is just a means for two parties to reach a decision. A memorandum of agreement or memorandum of understanding is a memorandum of agreement entered into when the parties have agreed to enter into a contract, but the formalities (such as the terms and conditions) of the contract are yet to be negotiated. This is done when there are preliminary discussions outlining the rights of two or more parties and the obligations of the parties to the agreement. It is used to ascertain the intention of the transaction parties before a deal has been officially signed between them and does not confer any rights on either of them. The MOU may be kept confidential by the parties, if desired.

This does not constitute a legally enforceable obligation but, this illegally binding Memorandum of Understanding can be useful to serve as an agreement between two or more departments within a single public entity.

A what is a signed agreement ?

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Features of MoU:

A Memorandum of Understanding should have the following characteristics: A what is a signed agreement ?

1. It should specify the name and other details of the parties between whom the MoU is being signed.

2. It should clearly specify the purpose and goals for which the memorandum is being signed.

3. It should specify the plan for meetings between the parties. For example the parties may decide to meet at least once a quarter.

4. The memorandum should specify the amount of capital contribution to be made by the parties.

5. It should also mention the person authorized to make major financial decisions.

6. Financial record keeping of the assignment/schedule being done should also be maintained.

7. Management: Can provide memorandum of appointment of persons to look after the day to day operations of the program. The role, responsibilities, and remuneration should also be mentioned.

8. Once the Memorandum of Understanding is prepared and agreed upon by the parties involved, it must be signed and dated by persons authorized to represent each party or organization.

9. The memorandum should specify( A what is a signed agreement ? ) the duration of such an agreement between the parties ie the beginning and ending dates of the memorandum. Further, it should provide for the circumstances in which such memorandum shall be given expired.


The MoU is made at the initial stage of discussion between the parties, which is usually an oral discussion. Negotiations between the two parties become a part of a Memorandum of Understanding that includes:

  • there is a consensus between the parties, and
  • That is, such a memorandum of understanding serves as a basis for making a formal contract later-on.

The intention of the parties may be derived from the material and material provision of the MOU ( A what is a signed agreement ? ). Thus, as per the intention of the parties, the draft Memorandum of Understanding will be scrutinized and finalized. Thus the legal nature of an MoU rests on the rights, duties, obligations it creates between the parties.

Understanding the Format of a Memorandum of Understanding What to Include in the Format ie Memorandum:

Following are the contents of the MoU:

1. Purpose or purpose of entering into MoU,
2. Obligation of each party,
3. Methods of meeting and reporting,
4. Technical and financial assistance, any inf,
5. Financial considerations, if any, transactions , included in
6. Persons Responsible for Management,
7. Duration of MoU,
8. Confidentiality Clause,
9. Conditions Driving Towards Termination of MoU,
10. Possibility of Extension,
11. Methods of Communication,
12. Termination Clause,
13. Arbitration Clause,
14. indemnity clause, etc.

Depending on the nature of the transaction covered under the MoU, clauses may be added or removed and agreed upon with mutual consent.

Legal Validity of Memorandum of Understanding.

A Memorandum of Understanding (MOU) does not constitute a legally enforceable obligation. It is usually used for a non-binding contract, which states the intention of the parties or businesses to work together.

An MoU has been prepared for consideration, like for exchange of money, etc., the document will be binding on the parties, and it is a non-binding contract. The intention of the parties may be derived from the material and material provision of the MOU. Clauses such as Jurisdiction Clause, Applicable Law, Indemnity have binding effect to the Agreement. Thus the legal nature of an MoU rests on the rights, duties, obligations it creates between the parties.

In the legal scenario, the naming of an agreement is thus irrelevant to calling a contract that is non-binding only on an agreement does not automatically denote a memorandum of understanding.

MoU enforceability as per law:

The Memorandum of Understanding is governed by the Contract Act, 1872, and if the conditions under the Contract Act are satisfied, then the performance of a Memorandum of Understanding in the Specific Relief Act, 1963 where a specific relief when compensation cannot be ensured is provided can be applied under monetary terms.

In the case where the conditions under the Contract Act, 1872, are not fulfilled, the Memorandum of Understanding is not recognized as a legally valid contract. But, it still estoppels the promise and can be enforced in a court of law based on the principles of equity.

Duty Stamp on MoU:

Generally, no stamp duty is payable on the MoU. However, the MoU covers an agreement for the purchase of immovable property of value exceeding Rs. 100/- and if you need to produce it in court, it should be stamped.

A stamp duty paid document becomes finely valued and is accepted as evidence in court. Document not properly stamped, is not accepted as evidence by the Court.

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