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Contract & Commercial Law vocabulary · Forming & Drafting Contracts

Memorandum of understanding

Meaning in contract & commercial law, with examples

nounCommon term

In contract & commercial law, memorandum of understanding means: A document that records the main points the parties have agreed on and their plan to cooperate, usually without creating full legal obligations.

In Turkish: mutabakat zaptı, anlaşma muhtırası, mutabakat metni

How it is used

Shortened to MOU or MoU. Common between companies exploring a partnership and between public bodies. Whether an MOU is binding depends on its wording, so drafters state clearly which parts, if any, are legally binding.

Example sentences

  1. The two companies signed a memorandum of understanding to explore a joint venture in renewable energy.

  2. The memorandum of understanding is non-binding except for the confidentiality section.

Common collocations

  • sign a memorandum of understanding
  • non-binding MOU
  • enter into an MOU
  • letter of intentA document that records the parties' intention to make a deal and its main points before the final contract is negotiated and signed.
  • bindingHaving legal force, so that the parties must do what they have agreed and can be held responsible if they do not.
  • agreementAn arrangement between parties about what each of them will do; it becomes a contract when the law treats it as binding.
  • negotiateTo discuss the terms of a deal with the other side in order to reach an agreement that both can accept.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Forming & Drafting Contracts

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This page explains English vocabulary for learners. It is not legal advice.