Difference between revisions of "Memorandum Of Understanding"

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A memorandum of understanding (MOU) is a legal agreement between two parties that carries less weight than a formal contract but more than an informal agreement, and outlines the parties rights and responsibilities under the memorandum. MOUs are commonly used in international agreements and are also sometimes used as a synonym for letter of intent.
A memorandum of understanding (MOU) is a legal agreement between two parties that carries less weight than a formal contract but more than an informal agreement, and outlines the parties' rights and responsibilities under the memorandum. MOUs are commonly used in international agreements and the term is sometimes used as a synonym for "letter of intent".


== First step ==
== First step ==


While an MOU does not have the same legal standing as a formal contract, it is often used as the first stage of the contract process since it is legally enforceable if one of the parties fails to meet its obligations.<ref>{{cite web|url=http://www.answers.com/topic/memorandum-of-understanding|name=Memorandum of Understanding - MOU|org=Answers.com|date=January 7, 2008}}</ref> MOUs are commonly used in international public law on place of treaties, since their terms can be kept confidential, don't require ratification and can be modified without lengthy negotiations.<ref>{{cite web|url=http://www.wisegeek.com/what-is-a-memorandum-of-understanding.htm|name=What is a Memorandum of Understanding?|org=WiseGeek.com|date=January 7, 2008}}</ref>
While an MOU does not have the same legal standing as a formal contract, it is often used as the first stage of the contract process, since it is legally enforceable if one of the parties fails to meet its obligations.<ref>{{cite web|url=http://www.answers.com/topic/memorandum-of-understanding|name=Memorandum of Understanding - MOU|org=Answers.com|date=January 7, 2008}}</ref> MOUs are commonly used in international public law on place of treaties, since their terms can be kept confidential, don't require ratification and can be modified without lengthy negotiations.<ref>{{cite web|url=http://www.wisegeek.com/what-is-a-memorandum-of-understanding.htm|name=What is a Memorandum of Understanding?|org=WiseGeek.com|date=January 7, 2008}}</ref>


In the U.S. financial services industry, an MOU negotiated between an institution and its regulator or supervisor indicates that the bank, while not admitting any wrongdoing, will refrain from a practice deemed unsound by the regulator and take future action to correct the practice.<ref>{{cite web|url=http://www.allbusiness.com/glossaries/memorandum-understanding/4945382-1.html|name=Memorandum of understanding|org=Allbusiness.com|date=January 7, 2008}}</ref>
In the U.S. financial services industry, an MOU negotiated between an [[institution]] and its regulator or supervisor indicates that the [[bank]], while not admitting any wrongdoing, will refrain from a practice deemed unsound by the regulator and take future action to correct the practice.<ref>{{cite web|url=http://www.allbusiness.com/glossaries/memorandum-understanding/4945382-1.html|name=Memorandum of understanding|org=Allbusiness.com|date=January 7, 2008}}</ref>


== Exchange MOUs ==
== Exchange MOUs ==

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