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girish shringi (advocate)     19 January 2011

memorandum of understanding

What is the obligations of the parties in memorandum of understanding (MOU)?

IIf any of the party fails to fulfill the terms of the MOU,what the remedy for the second party of the MOU.

Is  there any law to prevent such breach to the the terms of MOU?

If any amount paid by the either party, for fulfilling the MOU but time limit not specified,then whats the law will apply to it?

Girish Shringi




 5 Replies

Adv Archana Deshmukh (Practicing Advocate)     19 January 2011

MOU is nothing but an agreement between the parties, and its breach will attract the laws that governs the breach of that agreement, eg law of contract.

sanjay kumar (BE/ LLM in Corporate Laws)     20 January 2011

Yours is a bad case.

To put the things in a simple way, there are no laws which can govern the contracts. The contract is governed by its own clauses and stipulations. The Law only enforces these clauses and stipulations to the contracting parties. If any stipulation is missing in the contract, there is no law as such which will come to your rescue. Hope this is clear.

The breach of a contract or non-performance by a party are governed by Damages clause in the contract but the Damage clause is to be included in the contract. The same way, time for performance of the contract is to be included in the contract.

However, if the same is not included in the contract or missed, Law can still come to the rescue depending upon the situation, reasonableness of damages etc. It will all depend upon the interpretation of the contract by law.

Basavaraj (Asst, Manager-Legal)     01 February 2011


jackadim (IT manager)     21 February 2011

There are two main types of contract in business,Formal Contract of Business and Memorandum Of Understanding.A memorandum of understanding is less formal that an actual business contract and is a statement of intent on how the business will be run.The main disadvantage being that it is a broader statement of intent and may not list the day to day activities of running a business. Unlike formal business partnership contracts the MOU may not have a complete list of term of terms and conditions that can be used if any disputes occur. But an MOU is an effective tool in communicating the basic terms of the actual business.


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ashraf memon (hi)     08 June 2014

Mr. sanjay kumar is correct

you must have all the clauses in it since dont the same no place to siscuss it further


now the legal option you left with get whatever your work for which you paid find the maximum time limt for that particular work done as per the market standard

then file a case for the damage mentioned in it

if this is also not mentioned then go for the refund + 12% interest the paid amount lie to either of the party

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