Memorandum of Understanding (MOU)
A Memorandum of Understanding is a non-legally binding precursor document that allows you to record proposed terms with another party during the negotiation stage.
4.3 (186 reviews)
Last updated October 23, 2025
Under 10 minutes
Suitable for Australia
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Document Overview
If you are interested in entering into a formal agreement or formal contract with another entity, a Memorandum of Understanding (MOU) is a good document to start with if further negotiations ensue. A Memorandum of Understanding is a preliminary written agreement, though non-legally binding, sets out the intentions of the parties involved and their proposed terms & common vision in the negotiations with consent. After the Memorandum of Understandings commencement date occurs, you will be able to record what has already been agreed on before a legally enforceable document is executed.
As with any business dealing, it is paramount that both parties understand each other's goals and objectives. While this can be difficult at times, an MOU can be a great asset to your business relations. Without clear terms and effective communication, dealings will likely fail. This is why an MOU is greatly beneficial. Parties are able to simply set out their requirements and expectations. As a result, this will establish a common intention for future engagements.
Additionally, if you're communicating sensitive information to potential investors, it is essential to ensure this information is protected with a Memorandum of Understanding.
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