MOU versus Agreement

Guest (Querist) 05 August 2010 This query is : Resolved
Friends what is difference in legal value of MOU and "Agreement".Why MOU is more fashionable in business world these days?

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arunprakaash.m. (Expert) 05 August 2010
In legal parlance both MOU and agreement both have same binding and force of law between the parties.

However if the MOU has a clause that is a preliminary document between the parties before entering formal agreement then it is only understanding between the parties to enter into further negotiations and agreements. It is not enforcable.

Intention of the parties is very important in interpretation of a document.