The Full form of MOU is Memorandum of Understanding. MOU or MoU is a formal agreement between two or more parties which expresses the mutual accord on an issue. It is commonly used by the organizations and companies to establish official partnerships. Generally, MOUs are not legally binding contracts; but they contain all important details and have a high degree of seriousness and mutual respect.
They can be considered as the first step to a legal contract. They are also called LOI (Letter of Intent) in the United States. It is widely used in international agreements as it can be ratified and created in a short span of time. It can also be used to modify the existing legal deals. The term MOU (Memorandum of Understanding) is commonly used in India for a non-binding contract that describes the intention of two people or businesses to work in consensus.
The purpose of MOU is to establish and promote a cooperative and strategic partnership between two parties or companies. It is a non-binding agreement between two or more parties. An MOU template contains an outline of the details, terms and conditions of the agreement. It would also include the responsibilities and requirements of each party.