A memorandum of understanding is a document that describes the broad outlines of an agreement that two or more parties have reached. MOUs communicate the mutually accepted expectations of all of the parties involved in a negotiation. While not legally binding, the MOU signals that a binding contract is imminent.

Similar to a contract, a memorandum of understanding is an agreement between two or more parties. Unlike a contract, however, an MOU need not contain legally enforceable promises. While the parties to a contract must intend to create a legally binding agreement, the parties to an MOU may intend otherwise.

MOU can be cancelled any time if it is not registered and for the other party file the private police complaint.

The purpose of a memo is usually found in the opening paragraph and includes: the purpose of the memo, the context and problem, and the specific assignment or task. Before indulging the reader with details and the context, give the reader a brief overview of what the memo will be about.

The recitals in MOU will explain the limitation, however it is three years from the date of its execution if time is not essence of contract.

International MoU is also not legally binding but the language used there must show the intention of the parties to perform and to work together. As stated above all MoU must not be formally but only those should be formally made and registered which include the exchange of some monetary value.

If the Memorandum of Understanding is terminated by either Party, steps shall be taken to ensure that the termination does not affect any prior obligation, project or activity already in progress.”

In situations where registered documents are mandatory, no amount of legal jargon would make a MoU stand up in a court of law. This is why an unregistered MoU has hardly any importance in real estate, and why everyone opts for a notarised agreement, even if it is just to lease out a house for 11 months.