This is because in many cases, Parties may not actually be certain about the specific terms which they can agree to, but they still find it beneficial to put something in writing, outlining some broader goals (such as the general nature of the project), and confirming that they will act in good faith in pursuit of those goals.įurther, even in the case of Memorandums which are non-binding, parties may choose to have the obligations on confidentiality as binding since they may be sharing sensitive and confidential information with the other parties in order to enable them to carry out further investigations or due diligence before finalizing all the details of the Project. If it is chosen to be non-binding, the Parties may not actually be legally obliged to comply with it. Often, Parties may sign a Memorandum of Understanding outlining some general agreement, and then will go away and make some further investigations before working out the finer details.

In the first case, the Memorandum acts as a general agreement between the Parties which covers the broad understanding of the Parties.

This Memorandum can be chosen to be legally binding or non-binding. It is intended as a starting point for the Parties, as it enables them to set out the preliminary understanding between one another and can help them to work towards a more formal agreement. This Memorandum of Understanding is for use between two or more Parties that are interested in working together on a particular project.

Mou template business