Difference between Agreement and MOU

This query is : Resolved 

22 September 2008

Please anyone let me know

1) The difference between an Agreement and MOU.

2)In what circumstance Agreement is used and in what circumstance MOU is used.


J K Agrawal (Expert)
22 September 2008

Agreement contains proposal and its acceptance and intention of parties is to bind each other with the terms of agreement. It is intention of parties that if any one violets the terms other will go to court and get it enforced.

MOU is Memo Of Understanding. Both parties proposed their intention and a commitment to follow the intention in future. It does not create a valid contract. But if one party do any thing on reliance of MOU and sustains any loss he can recover back losses but can not get enforced the MOU. The The Both Parties of MOU are bind by estoppel and any of them can not take adverse stand.

Adv.Shine Thomas (Expert)
22 September 2008

According to Indian Contract Act an agreement needs the following essentials.(a)a valid proposal or offer (b) an acceptance (c) a promise (d) consideration for the promise.
A MOU must (a) identify the contracting parties (b) spell out the subject matter of the agreement and its objectives (c) summarize the essential terms of the agreement,and (d) must be signed by the contracting parties.
MOU is like a contract,but it does not have to carry the same legal weight.If the wordings used in the MOU are vague and unclear and do not create any binding effect,then the same cannot be enforced.

Guest (Expert)
22 September 2008

Agreement : the act or fact of agreeing b: harmony of opinion, action, or character : concord

memorandum of understanding (MOU or MoU) is a document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action. 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. It is a more formal alternative to a gentlemen's agreement

Anil (Querist)
22 September 2008

Thank you sirs

Murali Krishna (Expert)
22 September 2008

Some time back, Manish Singh answered a similar question.

J.K.Agarwal's answer gave further clarification.

dinesh (Expert)
08 September 2009

Yet, the difference between the MOU and Agreement is a thin one. It is an established law law that the nomenaclautre is not important iot is the pith and substance of document, intentions of the parties and nature and contents of documents that determine its chaaracter. If it established that it is only an MOU then also it is of binding if the parties have acted upon it (even partially).riven

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