Definition

memorandum of understanding (MOU or MoU)

Part of the Business terms glossary:

A memorandum of understanding (MOU or MoU) is a formal agreement between two or more parties. Companies and organizations can use MOUs to establish official partnerships.

MOUs are not legally binding but they carry a degree of seriousness and mutual respect, stronger than a gentlemen’s agreement. Often, MOUs are the first steps towards a legal contract. In US law, a memorandum of understanding is synonymous with a letter of intent (LOI), which is a non-binding written agreement that implies a binding contract is to follow.

MOUs are popular in multinational international relations because, unlike treaties, they take a short time to ratify and can be kept confidential. MOUs may also be used to modify existing legal treaties.

See also: prime contractdigital signature, contracting officer, partner relationship management, partner

 

 

Continue reading about memorandum of understanding:

Here is an example of a MoU between the National Science Foundation and NASA.

Oil-for-Food is an international MoU.

This was last updated in January 2011
Posted by: Margaret Rouse

Related Terms

Definitions

  • third party

    - A third party is an entity that is involved in some way in an interaction that is primarily between two other entities. The third party may or may not be officially a part of the transaction betwee... (WhatIs.com)

  • dynamic pricing

    - The goal of dynamic pricing is to allow a company that sells goods or services over the Internet to adjust prices on the fly in response to market demands.  (WhatIs.com)

  • work-life balance

    - Work-life balance is the optimal arrangement of an individual’s on-the-job and private time to facilitate health and personal satisfaction without hindering productivity or professional success. (WhatIs.com)

Glossaries

  • Business terms

    - Terms related to business, including definitions about project management and words and phrases about human resources, finance and vertical industries.

  • Internet applications

    - This WhatIs.com glossary contains terms related to Internet applications, including definitions about Software as a Service (SaaS) delivery models and words and phrases about web sites, e-commerce ...

Ask a Question About memorandum of understanding (MOU or MoU)Powered by ITKnowledgeExchange.com

Get answers from your peers on your most technical challenges

Tech TalkComment

Share
Comments

    Results

    Contribute to the conversation

    All fields are required. Comments will appear at the bottom of the article.