Memorandum of Understanding (MOU) is a formal agreement document between two or more parties. A MOU is a nonbinding and not a legal agreement but a formal agreement and indicates the intention of common business interest, outline of terms and conditions, individual roles and responsibilities, and the establishment of a business relationship to be continued and likely result in a legal agreement or contract in due course.
Reference Definition by Businessdictionary.com: Memoranda of understanding are generally recognized as binding, even if no legal claim could be based on the rights and obligations laid down in them. To be legally operative, a memorandum of understanding must (1) identify the contracting parties, (2) spell out the subject matter of the agreement and its objectives, (3) summarize the essential terms of the agreement, and (4) must be signed by the contracting parties. Also called letter of intent.
Related Definitions in the Project: The Project Management; Project Contract
