If you need to rely on the other organisation taking certain actions or if your organisation stands to lose money if the other party doesn’t act – your organisation should enter into a contractual arrangement. The Second Party is engaged in the business of, inter alia growing and trading of horticultural commodities and is ready to supply fresh fruits and vegetables. A memorandum of understanding (MOU) is a document between at least two parties that explains the proposed agreement between them. The MOU defines who the parties are and what their expected contributions will be. Usually, the project is short-term and has a forecasted end date. It does not involve the transfer of funds. A Memorandum of Understanding defines a business project you are planning to undertake with another partner or partners. To help avoid any uncertainty about whether an MOU is legally binding, your organisation should make sure the MOU contains a specific statement to the effect that it is not intended to create legally binding obligations. An MoU includes general commitments concerning WaterAid policies but is not legally enforceable. An MOU is therefore usually more of a 'high level' agreement.Īn MOU is generally considered ‘an agreement to agree’ or an agreement to enter into a more specific and comprehensive contract or agreement at a later time after further negotiations. Every businessmans goal is to make their business flourish and enter the global market, and they need partners to meet such goal.
g., regular in-person meeting, conference calls, written approval of all activities by both parties), and how the parties will authorize and pay for any costs. In general, an MOU will not deal with the specific details of particular projects. An MOU should outline what each organization agrees to contribute to a partnership, a timeframe for delivering the desired outcomes, details of exactly how each party will collaborate (e. Before reading further, see our guide to working with other organisations.Īn MOU will typically establish a framework for the collaboration between the organisations and express the common goals or vision of the parties to the MOU.
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