Contract Glossary
Memorandum of Understanding (MOU)
Definition
A formal document outlining the terms and details of an agreement between two or more parties before a binding contract is finalized. An MOU signals mutual intent — both sides agree on the broad strokes, but the document usually isn't legally enforceable unless it contains specific binding language.
In Practice
You're a nonprofit partnering with a corporate sponsor for a community event. Before drafting a full sponsorship agreement, you sign an MOU stating the sponsor will contribute $50,000 in exchange for logo placement and speaking slots. The MOU sets expectations and prevents misunderstandings while lawyers finalize the binding contract. If the sponsor backs out before the final agreement, the MOU alone usually won't let you force payment — but it creates a paper trail showing their commitment.
Example Clause
This Memorandum of Understanding sets forth the mutual intentions of the Parties regarding the proposed collaboration described herein. Unless expressly stated otherwise, this MOU is not intended to create legally binding obligations and shall not be construed as a contract or commitment to enter into a contract.
Common in these contract types
Related contract clauses
Related articles
What Is a Service Agreement? Key Clauses
A service agreement defines terms between provider and client. Learn key clauses to include, common types, and how they differ from other contracts.
When Do You Need a Service Agreement?
Not sure if you need a formal service agreement? Learn where casual help ends and business services begin, and why contracts prevent costly disputes.
DJ and Event Entertainment Contract Guide
Protect your next gig with a solid DJ contract — get templates for performance terms, equipment clauses, and cancellation policies.
Frequently asked questions about memorandum of understanding (mou)
Generally no, but it depends on the language and jurisdiction. If an MOU includes specific obligations, consideration, and language indicating intent to be bound, courts may treat it as enforceable. Most MOUs include a disclaimer stating they are non-binding — but individual clauses (like confidentiality or exclusivity) may still be enforceable if drafted that way.
Create a contract with proper memorandum of understanding (mou) clauses
Generate a professional contract in minutes with all the essential clauses — no legal expertise needed.
Create your contractThis content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.