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What is A MOU or A Memorandum of Understanding? [60-Second Law Bite]

Hey everyone, this is attorney Brian Russ, coming at you with another 60 second law bite. So today’s topic is What is an MOU or also known as a memorandum of understanding. They’re supposed to be non binding agreements, where it just evidence is the intent of the parties to have a discussion about something or to discuss a potential collaboration, something like that. I think a lot of people will fall into a trap where they say, because they put MOU or Memorandum of Understanding on the top of the agreement, they say, oh, therefore it’s not a contract, but it still can be the contract. It doesn’t matter what the header of the document is. Just because it’s called an MOU does not mean it is not a contract. You know, if it still has the elements of a contract, it has the mutual assent, offer acceptance, consideration, capacity, legality and so on like that. Even though it’s called an MOU. It’ll probably be a binding contract. So what I usually recommend is, add language in the MOU that says, “this is not a binding contract, it can be terminated at any time the parties are receiving nothing of value through this, this MOU is for ceremonial purposes only or symbolic purposes only.” Or else what ends up happening is people think that, they sign it and while you’re thinking it’s not binding, when actually it might be and then you run into some problems. If you need help, contact a lawyer see what’s going on. Thanks.

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