An MOU expresses a shared understanding and intention between parties. It is typically non-binding but can inadvertently create binding obligations. MOUs are common in international affairs, charity partnerships, research collaborations, and early-stage commercial relationships.

• Typically non-binding — but courts may find otherwise if it contains specific obligations
• Must state clearly it is non-binding if that is the intention
• Contrast with LOI: LOIs are used before a specific deal; MOUs for ongoing cooperation
• Confidentiality provisions within an MOU can be binding
• Government and NGO MOUs: often used between public bodies where contracts are inappropriate

Legal reference: Contract law; Rose and Frank Co v JR Crompton [1925] (letters of comfort); Edwards v Skyways [1964]