Memorandum of Understanding

MOU is two or more parties consensus ad idem to work together for achieving the common object. MOU is the abbreviation for Memorandum of  Understanding. The MOU is also called as a Gentleman agreement.  It most often is used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforcement agreement.

MOU in simple words :
MOU is generally a preliminary understanding between the parties to a proposed contract. It is a formal piece of document which expresses the intention of two or more parties to collaborate together and it is also called as Letter of intent. MOU is usually carried out for building consensus between the parties for future agreement and is typically not intended to have created any obligations upon the parties.

In India, Indian Contact Act, 1972 governs Memorandum of understanding. The Memorandum of Understanding is enforceability considered and enforced under Specific Relief Act.

But the enforceability comes only when the terms fulfils the conditions for a contract under Indian Contract Act 1972.

In specific to say, there should be an offer and the other party should have accepted the offer for a consideration. When a MOU does not fulfil the conditions of a contract under Indian Contract Act 1972 then, in that case, the Court may hold the Memorandum of Understanding as invalid.